Impulsivity and household indebtedness: Evidence from real life

Cristina Ottaviani, Daniela Vandone

Research output: Contribution to journalArticlepeer-review


Using a probit model, we estimated the role of emotional factors in determining household participation in the debt market, after controlling for such traditional economic predictors as age, level of education, income, wealth, and work status. A sample of 445 Caucasian subjects selected among fulltime employees at international asset management companies underwent the Barratt Impulsiveness Scale, the Iowa Gambling Task (IGT) while skin conductance was recorded, and a series of questions related to their demographic-socio-economic profile. Aside from confirming the role played by traditional explanatory variables commonly used as determinants of household indebtedness, results revealed the significant influence of individuals' impulsivity in making debt decisions. Impulsivity predicted unsecured debt (i.e. consumer credit), but it was not significantly associated with secured debt (i.e. mortgages). Neither presence of a somatic marker to guide decisions nor performance at the IGT predicted real-life indebtedness decisions in this non-clinical sample. The notion that " non-rational" factors influence debt demand has been largely ignored and raises concerns about the risk of over-indebtedness for impulsive individuals.

Original languageEnglish
Pages (from-to)754-761
Number of pages8
JournalJournal of Economic Psychology
Issue number5
Publication statusPublished - Oct 2011


  • Behavioral economics
  • Decision-making
  • Household indebtedness
  • Impulsivity
  • Iowa Gambling Task
  • Probit model

ASJC Scopus subject areas

  • Sociology and Political Science
  • Applied Psychology
  • Economics and Econometrics


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