THE INFLUENCE OF EMOTIONAL FACTORS, MATERIALISM, RISK PERCEPTION, AND FINANCIAL LITERACY ON THE TENDENCY OF DEBT OF MILLENNIAL GENERATION IN SURABAYA
Keywords:
Emotions, Financial Literacy, Propensity Debt, Materialism, Perceptions of Risk
Abstract
This study aims to determine the effect of emotion, materialism, risk perception, and financial literacy on the propensity toward indebtedness of the millennial generation in Surabaya. The researcher uses a online questionnaire distributed via Google Form to 110 millennials in Surabaya. The collected data is processed using Partial Least Square (PLS). This study indicates that emotion, materialism, and perceptions have a significant effect on indebtedness propensity.
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References
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Caetano, G., Palacios, M., & Patrios, HA (2011). Measuring aversion to debt: experiments among student loan candidates. Retrieved from Policy Research Working Paper: http://documents. worldbank.org/curated/en/875171468183545929 / Measuring-aversion-to-debt-an-experiment-among-student-loan-candidates
Cakarnis, J., & D' Alessandro, SP (2015). Does knowing overcome wanting? The impact of consumer knowledge and materialism upon credit card selection with young consumers. Young Consumers, 50-70.
Collette, R.L. (1990). Harvesting techniques. In RE Martin & GJ Flick (Eds.), The seafood industry, 471-526, New York: Van Nostrand Reinhold.
Davies, E., & Lea, S., (1995). Student attitudes to student debt. Journal of Economic Psychology, 663-679.
Disney, R., & Gathergood, J. (2011). Financial literacy and indebtedness: new evidence for UK consumers. Retrieved from EconPapers: http://econpapers.repec.org/paper/notnotcfc/11_2f05
Disney, R., & Gathergood, J. (2013). Financial literacy and consumer credit portfolios. Journal of Banking and Finance, 2246-2254.
Doosti, BA, & Karampour, A. (2017). The impact of behavioral factors on propensity toward indebtedness case study: indebted customers of Maskan Bank, Tehran province (geographic regions: east). Journal of Advances in Computer Engineering and Technology, 21-30.
Flores, SM, & Vieira, KM (2014). Propensity toward indebtedness: an analysis using behavioral factors. Journal of Behavioral and Experimental Finance, 1-10.
French, D., & McKillop, D. (2016). Financial literacy and over-indebtedness in low-income households. International Review of Financial Analysis, 1-11.
Gabriel, F., & Linawati, N. (2020). Pengaruh financial capability, money attitudes, dan socioeconomic status terhadap adverse financial events. International Journal of Financial and Investment Studies (IJFIS), 1(1), 15-20. https://doi.org/10.9744/ijfis.1.1.15-20
Gardarsdottir, RB, & Dittmar, H. (2012). The relationship of materialism to debt and financial well-being: The case of Iceland's perceived prosperity. Journal of Economic Psychology, 471-481.
Garling, T., Kirchler, E., Lewis, A., & Raaij, F.V. (2009). Psychology, financial decision making, and financial crises. Psychological Science in the Public Interest, 1-47.
Gathergood, & Gathergood, J. (2012). Self-control, financial literacy and consumer over-indebtedness. Journal of Economic Psychology, 590-602.
Ghozali, I. (2011). Multivariate Analysis Application with the IBM SPSS 19 Program. Semarang: Diponegoro University Publishing Agency.
Hong-Van, T., Phanuphak, N., Ananworanich, J., Vatanparast, R., Jadwattanakul, T., Pharac-hetsakul, N., Phanuphak, P. (2010). Acceptability of male circumcision for the prevention of HIV among high-risk heterosexual men in Thailand. Sexually Transmitted Diseases, 37(6), 352-355.
Indonesia Financial Inclusion Insight Survey. (2017, 5). Retrieved from Finclusion: http://finclusion.org/uploads/file/technical_report_indonesia_fii_iv_final. pdf
Kaufman, C., Perlman, R., & Speciner, M. (1995). Network security: private communication in a public world. Englewood Cliffs, NJ: Prentice-Hall.
Kamleitner, B., Hornug, B., & Kirchler, E. (2011). Over-indebtedness and the interplay of factual and mental money management: an interview study. New Zealand Economic Papers, 139-160.
Keese, M. (2012). Who feels constrained by high debt burdens? Subjective vs. objective measures of household debt. Journal of Economic Psychology, 125-141.
Kurniawan. J. Y., Malelak, M. I., & Astuti, D. (2020). Pengaruh attitude, subjective norm, past behavior, dan perceived control terhadap budgeting intention mahasiswa di Surabaya. International Journal of Financial and Investment Studies (IJFIS), 1(1), 21-29. https://doi.org/10.9744/ijfis.1.1.21-29
Livingstone, SM, & Lunt, PK (1992). Predicting personal debt and debt repayment: Psychological, social and economic determinants. Journal of Economic Psychology, 111-134.
Lokadata. (2017). Indonesian Online Shopping Research 2017.Retrieved from Lokadata.com: https://lokadata.beritagar.id/chart/preview/riset- Belanja-online-Indonesia-2017-1502791033
Lührmann, M., Serra-Garcia, M., & Winter, J. (2014). Teaching teenagers in finance: does it work? Journal of Banking & Finance, 160-174.
Lusardi, A., Mitchell, O.S., & Curto, V. (2010). Financial literacy among the young. Journal of Consumer Affairs, 358-380.
Macedo, L.G., Maher, C.G., Latimer, J., Hancock, M.J., Machado, L.A., & Mcauley, J.H. (2011). Respon¬siveness of the 24-, 18- and 11-item versions of the Roland Morris Disability Questionnaire. European Spine Journal, 458-463.
Muzafari, S., Mowlaie, S., & Bahmani, K. (2016). Relationship between Materialism and Financial Risk with the Mediating Role of Emotions and Indebtedness. Journal of Ecophysiology and Occupational Health, 98-102.
Nielsen, L. (2009). Green farm subsidies sponsoring eco-labeling: is the separation of market access and subsidies regulation in WTO law sustainable? Journal of World Trade, 43(6), 1193-1222. Retrieved from http://www.kluwerlawonline.com/productinfo.php? Pub code = TRAD
Olsen, R. (2009). Perceptions of financial risk: axioms and affect. ICFAI Journal of Behavioral Finance, 4.
Ottaviani, C., & Vandone, D. (2010). impulsivity and household indebtedness: evidence from real life. Journal of Economic Psychology, 754-761.
Pham, T.H., Yap, K., & Dowling, L.A. (2012). The impact of financial management practices and financial attitudes on the relationship between materialism and compulsive buying. Journal of Economic Psychology, 461-470.
Ponchio, M.C. (2006). The influence of materialism on consumption indebtedness in the context of lowincome consumers from the city of São Paulo. Retrieved from bibliotecadigital: https: // bibliotecadigita l. fgv.br/DSpace/bitstream/handle/10438/2519/142172.pdf
Potrich, A.G., Viera, K.M., & Mendes-da-Silva, W. (2016). Development of a financial literacy model for university students. Management Research Review, 356-376.
Puranidhi, A.W. (2019, January 10). Most Indebted Millennials. Retrieved from liputan6.com: https://www.liputan6.com/bisnis/read/3867348/millennial-most-owed-generationgenes
Quelch, J.A., & Jocz, K.E. (2007). Greater Good: How Good Marketing Makes for a Better World. Harvard Business Press, Boston.
Rahayu, A.Y. (2019, 8 29). Millennials in Indonesia have more installments than investments. Retrieved from Merderka.com: https://www.merdeka.com/uang/milenial-di- Indonesia-more-have-installments-than-investment.html
Richins, M.L., & Dawson, S.A. (1992). Consumer values orientation for materialism and its measurement: Scale development and validation. Journal of Consumer Research, 303-316.
Rudhiwantoro, A. (2018). Important Steps for Millennial Generation towards Financial Freedom through Investment. Journal of Accounting and Finance, 1.
Santos, C.P., & Fernandes, C.C. (2011). The socialization of consumption and the formation of materialism among adult. Rev. Admin. Mackenzie, 169-203.
Selvaraja, M., & Abdullah, A. (2019). Psychological factors effects on Propensity towards Indebtedness by applying the Behavioral Economic Theory: Evidence in Malaysia. Inter¬national Journal of Recent Technology and Engineering, 6.
Setiawan, K. (2020, February 1). Not smart to manage money, millennials are easily caught in debt. Retrieved from NU Online: https://www.nu.or.id/post/read/116082/tidak-smart-money-management - millennial-easy-entangled- debt
Sevin, N., Temizel, F., & Sayilir, Ö. (2012). The effects of financial literacy on the borrowing behavior of Turkish financial consumers. International Journal of Consumer Studies, 573-579.
Sugiyono. (2017). Business research methods: Quantitative, qualitative, combined and R&D approaches. Bandung: Alfabeta.
Supriyatna, I. (2019, September 15). These are three causes of millennial debt, avoid it immediately! Retrieved from Suara.com: https://www.suara.com/bisnis/2019/09/15/130554/i ni-three-causes-millennial-lots-debt-immediately-avoid
Tashandra, N. (2018, 3 22). 80 Percent of Online Shopping Consumers Young People and Women this article has been published on Kompas.com with the title "80 Percent of Online Shopping Consumers Young People and Women", https://lifestyle.kompas.com/read/2018/ 03/22/155001820/80-percent-of-consumers-shopping-online. Retrieved from Kompas.com: https://lifestyle.kompas.com/read/2018/03/22/155001820/80-percent-consumers-shopping-online-young-people-and-women? Page = all
Xie, Z. (2007). Modeling genetic regulatory networks: A new model for circadian rhythms in Drosophila and investigation of genetic noise in a viral infection process (Doctoral thesis, Lincoln University, 2007). Retrieved from http://hdl.handle.net/10182/31
Ajzen, I. (2005). Attitudes, personality, and behavior. New York: Two Penn Plaza.
Arikunto. (2013). Research procedure: A practical approach. Jakarta: Rineka Cipta.
Astuti, P. (2019, September 21). Serem, 40% of Indonesian Millennials are in Debt! Retrieved from Answers.com: https://www.awaban.com/read/article/id/2019/09/21/3/190923165228/ serem40 milenial_indonesia_terl ilit_hutangini_yang_harus_kamu_k tahu_untuk_m overcome
Barros, L., & Botelho, D. (2012). Hope, perceived financial risk and propensity for indebtedness. BAR - Brazilian Administration Review, 454-474.
BPS. (2016, September 6). Indonesia Entered the Era of Demographic Bonus. Retrieved from data¬boks.katadata.co.id: https://databoks.katadata.co.id/datapublish/2016/09/06/indonesia-entering-bonus-demographic-era-peak-occurs-in-2025-2030
BPS. (2019). Projections of Population in Surabaya City by Gender and Age Group in 2019. Retrieved from Surabaya Kota.bps.go.id: https://surabayakota.bps.go.id/dynamictable/2018/0 4/18/23 projection-population- Kota-Surabaya-by-sex-and-age-group-year-2019.html
Bruce, D. (2007, December 13). The chairman is frustrated by 'nonsense'. Otago Daily Times. Retrieved from http://www.odt.co.nz
Caetano, G., Palacios, M., & Patrios, HA (2011). Measuring aversion to debt: experiments among student loan candidates. Retrieved from Policy Research Working Paper: http://documents. worldbank.org/curated/en/875171468183545929 / Measuring-aversion-to-debt-an-experiment-among-student-loan-candidates
Cakarnis, J., & D' Alessandro, SP (2015). Does knowing overcome wanting? The impact of consumer knowledge and materialism upon credit card selection with young consumers. Young Consumers, 50-70.
Collette, R.L. (1990). Harvesting techniques. In RE Martin & GJ Flick (Eds.), The seafood industry, 471-526, New York: Van Nostrand Reinhold.
Davies, E., & Lea, S., (1995). Student attitudes to student debt. Journal of Economic Psychology, 663-679.
Disney, R., & Gathergood, J. (2011). Financial literacy and indebtedness: new evidence for UK consumers. Retrieved from EconPapers: http://econpapers.repec.org/paper/notnotcfc/11_2f05
Disney, R., & Gathergood, J. (2013). Financial literacy and consumer credit portfolios. Journal of Banking and Finance, 2246-2254.
Doosti, BA, & Karampour, A. (2017). The impact of behavioral factors on propensity toward indebtedness case study: indebted customers of Maskan Bank, Tehran province (geographic regions: east). Journal of Advances in Computer Engineering and Technology, 21-30.
Flores, SM, & Vieira, KM (2014). Propensity toward indebtedness: an analysis using behavioral factors. Journal of Behavioral and Experimental Finance, 1-10.
French, D., & McKillop, D. (2016). Financial literacy and over-indebtedness in low-income households. International Review of Financial Analysis, 1-11.
Gabriel, F., & Linawati, N. (2020). Pengaruh financial capability, money attitudes, dan socioeconomic status terhadap adverse financial events. International Journal of Financial and Investment Studies (IJFIS), 1(1), 15-20. https://doi.org/10.9744/ijfis.1.1.15-20
Gardarsdottir, RB, & Dittmar, H. (2012). The relationship of materialism to debt and financial well-being: The case of Iceland's perceived prosperity. Journal of Economic Psychology, 471-481.
Garling, T., Kirchler, E., Lewis, A., & Raaij, F.V. (2009). Psychology, financial decision making, and financial crises. Psychological Science in the Public Interest, 1-47.
Gathergood, & Gathergood, J. (2012). Self-control, financial literacy and consumer over-indebtedness. Journal of Economic Psychology, 590-602.
Ghozali, I. (2011). Multivariate Analysis Application with the IBM SPSS 19 Program. Semarang: Diponegoro University Publishing Agency.
Hong-Van, T., Phanuphak, N., Ananworanich, J., Vatanparast, R., Jadwattanakul, T., Pharac-hetsakul, N., Phanuphak, P. (2010). Acceptability of male circumcision for the prevention of HIV among high-risk heterosexual men in Thailand. Sexually Transmitted Diseases, 37(6), 352-355.
Indonesia Financial Inclusion Insight Survey. (2017, 5). Retrieved from Finclusion: http://finclusion.org/uploads/file/technical_report_indonesia_fii_iv_final. pdf
Kaufman, C., Perlman, R., & Speciner, M. (1995). Network security: private communication in a public world. Englewood Cliffs, NJ: Prentice-Hall.
Kamleitner, B., Hornug, B., & Kirchler, E. (2011). Over-indebtedness and the interplay of factual and mental money management: an interview study. New Zealand Economic Papers, 139-160.
Keese, M. (2012). Who feels constrained by high debt burdens? Subjective vs. objective measures of household debt. Journal of Economic Psychology, 125-141.
Kurniawan. J. Y., Malelak, M. I., & Astuti, D. (2020). Pengaruh attitude, subjective norm, past behavior, dan perceived control terhadap budgeting intention mahasiswa di Surabaya. International Journal of Financial and Investment Studies (IJFIS), 1(1), 21-29. https://doi.org/10.9744/ijfis.1.1.21-29
Livingstone, SM, & Lunt, PK (1992). Predicting personal debt and debt repayment: Psychological, social and economic determinants. Journal of Economic Psychology, 111-134.
Lokadata. (2017). Indonesian Online Shopping Research 2017.Retrieved from Lokadata.com: https://lokadata.beritagar.id/chart/preview/riset- Belanja-online-Indonesia-2017-1502791033
Lührmann, M., Serra-Garcia, M., & Winter, J. (2014). Teaching teenagers in finance: does it work? Journal of Banking & Finance, 160-174.
Lusardi, A., Mitchell, O.S., & Curto, V. (2010). Financial literacy among the young. Journal of Consumer Affairs, 358-380.
Macedo, L.G., Maher, C.G., Latimer, J., Hancock, M.J., Machado, L.A., & Mcauley, J.H. (2011). Respon¬siveness of the 24-, 18- and 11-item versions of the Roland Morris Disability Questionnaire. European Spine Journal, 458-463.
Muzafari, S., Mowlaie, S., & Bahmani, K. (2016). Relationship between Materialism and Financial Risk with the Mediating Role of Emotions and Indebtedness. Journal of Ecophysiology and Occupational Health, 98-102.
Nielsen, L. (2009). Green farm subsidies sponsoring eco-labeling: is the separation of market access and subsidies regulation in WTO law sustainable? Journal of World Trade, 43(6), 1193-1222. Retrieved from http://www.kluwerlawonline.com/productinfo.php? Pub code = TRAD
Olsen, R. (2009). Perceptions of financial risk: axioms and affect. ICFAI Journal of Behavioral Finance, 4.
Ottaviani, C., & Vandone, D. (2010). impulsivity and household indebtedness: evidence from real life. Journal of Economic Psychology, 754-761.
Pham, T.H., Yap, K., & Dowling, L.A. (2012). The impact of financial management practices and financial attitudes on the relationship between materialism and compulsive buying. Journal of Economic Psychology, 461-470.
Ponchio, M.C. (2006). The influence of materialism on consumption indebtedness in the context of lowincome consumers from the city of São Paulo. Retrieved from bibliotecadigital: https: // bibliotecadigita l. fgv.br/DSpace/bitstream/handle/10438/2519/142172.pdf
Potrich, A.G., Viera, K.M., & Mendes-da-Silva, W. (2016). Development of a financial literacy model for university students. Management Research Review, 356-376.
Puranidhi, A.W. (2019, January 10). Most Indebted Millennials. Retrieved from liputan6.com: https://www.liputan6.com/bisnis/read/3867348/millennial-most-owed-generationgenes
Quelch, J.A., & Jocz, K.E. (2007). Greater Good: How Good Marketing Makes for a Better World. Harvard Business Press, Boston.
Rahayu, A.Y. (2019, 8 29). Millennials in Indonesia have more installments than investments. Retrieved from Merderka.com: https://www.merdeka.com/uang/milenial-di- Indonesia-more-have-installments-than-investment.html
Richins, M.L., & Dawson, S.A. (1992). Consumer values orientation for materialism and its measurement: Scale development and validation. Journal of Consumer Research, 303-316.
Rudhiwantoro, A. (2018). Important Steps for Millennial Generation towards Financial Freedom through Investment. Journal of Accounting and Finance, 1.
Santos, C.P., & Fernandes, C.C. (2011). The socialization of consumption and the formation of materialism among adult. Rev. Admin. Mackenzie, 169-203.
Selvaraja, M., & Abdullah, A. (2019). Psychological factors effects on Propensity towards Indebtedness by applying the Behavioral Economic Theory: Evidence in Malaysia. Inter¬national Journal of Recent Technology and Engineering, 6.
Setiawan, K. (2020, February 1). Not smart to manage money, millennials are easily caught in debt. Retrieved from NU Online: https://www.nu.or.id/post/read/116082/tidak-smart-money-management - millennial-easy-entangled- debt
Sevin, N., Temizel, F., & Sayilir, Ö. (2012). The effects of financial literacy on the borrowing behavior of Turkish financial consumers. International Journal of Consumer Studies, 573-579.
Sugiyono. (2017). Business research methods: Quantitative, qualitative, combined and R&D approaches. Bandung: Alfabeta.
Supriyatna, I. (2019, September 15). These are three causes of millennial debt, avoid it immediately! Retrieved from Suara.com: https://www.suara.com/bisnis/2019/09/15/130554/i ni-three-causes-millennial-lots-debt-immediately-avoid
Tashandra, N. (2018, 3 22). 80 Percent of Online Shopping Consumers Young People and Women this article has been published on Kompas.com with the title "80 Percent of Online Shopping Consumers Young People and Women", https://lifestyle.kompas.com/read/2018/ 03/22/155001820/80-percent-of-consumers-shopping-online. Retrieved from Kompas.com: https://lifestyle.kompas.com/read/2018/03/22/155001820/80-percent-consumers-shopping-online-young-people-and-women? Page = all
Xie, Z. (2007). Modeling genetic regulatory networks: A new model for circadian rhythms in Drosophila and investigation of genetic noise in a viral infection process (Doctoral thesis, Lincoln University, 2007). Retrieved from http://hdl.handle.net/10182/31
Published
2021-06-07
How to Cite
Widjaja, R., & Pertiwi, D. (2021). THE INFLUENCE OF EMOTIONAL FACTORS, MATERIALISM, RISK PERCEPTION, AND FINANCIAL LITERACY ON THE TENDENCY OF DEBT OF MILLENNIAL GENERATION IN SURABAYA. International Journal of Financial and Investment Studies (IJFIS), 1(2), 85-93. https://doi.org/10.9744/ijfis.1.2.85-93
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