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Financial Delegation in Late Adulthood Sylvain Hohn Anup Basu Uwe Dulleck Nicolas Cherbuin Julie Henry Sylvain Hohn Financial Delegation in Late Adulthood BEST Conference 13 February 2020 Brisbane

Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

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Page 1: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Financial Delegation in Late Adulthood

Sylvain Hohn

Anup BasuUwe Dulleck

Nicolas CherbuinJulie Henry

Sylvain Hohn Financial Delegation in Late Adulthood

BEST Conference13 February 2020Brisbane

Page 2: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Financial Risk in Late AdulthoodResearch OverviewTelephone ScreeningFinancial AssessmentDelegation Experiment

Research Background

Financial decision-making in late adulthood can be problematic.Older individuals are more likely to

show decreased financial skills esp. with onset of cognitive impairment(Triebel et al., 2009)

forget paying bills (Hsu & Willis, 2013)

invest in fraudulent schemes (Hsu & Willis, 2013)

making poorer financial choices (Agarwal et al., 2009)

Motivation: Assess preparedness to delegate financial decision-making inlate adulthood.

Sylvain Hohn Financial Delegation in Late Adulthood 1 / 34

Page 3: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Financial Risk in Late AdulthoodResearch OverviewTelephone ScreeningFinancial AssessmentDelegation Experiment

Research Overview

Question

How do key

factors such as

education, age,

gender and

option to revoke

influence the

willingness to

transfer financial

decisions?

Cognitive

Assessment

Executive

Functioning,

Memory

Financial Assessment

Everyday financial

abilities, estate

management, etc.

Telephone Survey

Overall cognitive

functioning

Advertisement,

RecruitmentDelegation

Experiment

Willingness to

transfer decisions

Financial Assessment

Everyday financial

abilities, estate

management, etc.

Question 2

How do different

elements of

cognition relate

to Financial

Capacity (FC)?

Telephone Survey

Ability to

communicate,

dementia and

stroke screening

Cognitive

Assessment

Executive

Functioning,

Memory

Financial Assessment

Everyday financial

abilities, estate

management, etc.

Telephone Survey

Overall cognitive

functioning

Question 2

How do different

elements of

cognition relate

to Financial

Capacity (FC)?

Sylvain Hohn Financial Delegation in Late Adulthood 2 / 34

Page 4: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Financial Risk in Late AdulthoodResearch OverviewTelephone ScreeningFinancial AssessmentDelegation Experiment

Area (Participants)

Sylvain Hohn Financial Delegation in Late Adulthood 3 / 34

Page 5: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Financial Risk in Late AdulthoodResearch OverviewTelephone ScreeningFinancial AssessmentDelegation Experiment

Participants

Age Distribution in Greater Brisbane Area

Sample (s) Population (p) ∆s−p

Age cnt rel cnt rel rel

60 – 64 22 17.19% 114276 28.27% –11.09%

65 – 69 36 28.13% 103118 25.51% +2.61%

70 – 74 31 24.22% 75090 18.58% +5.64%

75 – 79 27 21.09% 52275 12.93% +8.16%

80 – 84 8 6.25% 35231 8.72% –2.47%

85 – 89 4 3.13% 24172 5.98% –2.86%

Sum 128 100% 404162 100% 0

Sylvain Hohn Financial Delegation in Late Adulthood 4 / 34

Page 6: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Financial Risk in Late AdulthoodResearch OverviewTelephone ScreeningFinancial AssessmentDelegation Experiment

Telephone Screening

Question 1

How do key

factors such as

education, age,

gender and

option to revoke

influence the

willingness to

transfer financial

decisions?

Cognitive

Assessment

Executive

Functioning,

Memory

Financial Assessment

Everyday financial

abilities, estate

management, etc.

Advertisement,

RecruitmentDelegation

Experiment

Willingness to

transfer decisions

Financial Assessment

Everyday financial

abilities, estate

management, etc.

Question 2

How do different

elements of

cognition relate

to Financial

Capacity (FC)?Telephone Survey

Overall cognitive

functioning

Question 1

How do key

factors such as

education, age,

gender and

option to revoke

influence the

willingness to

transfer financial

decisions?

Cognitive

Assessment

Executive

Functioning,

Memory

Financial Assessment

Everyday financial

abilities, estate

management, etc.

Advertisement,

RecruitmentDelegation

Experiment

Willingness to

transfer decisions

Financial Assessment

Everyday financial

abilities, estate

management, etc.

Question 2

How do different

elements of

cognition relate

to Financial

Capacity (FC)?Telephone Survey

Overall cognitive

functioning

Telephone Survey

Ability to

communicate,

dementia and

stroke screening

Sylvain Hohn Financial Delegation in Late Adulthood 5 / 34

Page 7: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Financial Risk in Late AdulthoodResearch OverviewTelephone ScreeningFinancial AssessmentDelegation Experiment

Telephone Example

Please count backwards from 20 to 1

I’m going to read you a list of 10 words.

Please listen carefully and try to remember them.

When I am done, tell me as many as you can in

any order. Ready?

Read words at a 1 second pace.

Now, tell me all the words you can remember.

Sylvain Hohn Financial Delegation in Late Adulthood 6 / 34

Page 8: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Financial Risk in Late AdulthoodResearch OverviewTelephone ScreeningFinancial AssessmentDelegation Experiment

Financial Assessment

Question 1

How do key

factors such as

education, age,

gender and

option to revoke

influence the

willingness to

transfer financial

decisions?

Cognitive

Assessment

Executive

Functioning,

Memory

Advertisement,

RecruitmentDelegation

Experiment

Willingness to

transfer decisions

Question 2

How do different

elements of

cognition relate

to Financial

Capacity (FC)?Telephone Survey

Overall cognitive

functioning

Telephone Survey

Ability to

communicate,

dementia and

stroke screening

Financial Assessment

Everyday financial

abilities, estate

management, etc.

Question 1

How do key

factors such as

education, age,

gender and

option to revoke

influence the

willingness to

transfer financial

decisions?

Cognitive

Assessment

Executive

Functioning,

Memory

Advertisement,

RecruitmentDelegation

Experiment

Willingness to

transfer decisions

Question 2

How do different

elements of

cognition relate

to Financial

Capacity (FC)?Telephone Survey

Overall cognitive

functioning

Telephone Survey

Ability to

communicate,

dementia and

stroke screening

Financial Assessment

Everyday financial

abilities, estate

management, etc.

Financial Assessment

Everyday financial

abilities, estate

management, etc.

Sylvain Hohn Financial Delegation in Late Adulthood 7 / 34

Page 9: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Financial Risk in Late AdulthoodResearch OverviewTelephone ScreeningFinancial AssessmentDelegation Experiment

Example Financial AssessmentBasic arithmetic calculation - Give person menu (Item H) and say:

You have $7.00 and want to buy lunch, here is the menu:

(i). How much would a sandwich and a coffee cost you?

(ii). What can you buy for $7.00?

(iii). You buy four oranges for $2, how much are they each?

[Correct answer= 50 cents]

(iv). You have a $5.00 note. You spend $3.60.

How much change should you get? [Correct answer = $1.40]

If person says that s/he would usually use a calculator (and has

OWN calculator with him/her) - allow person to use it and observe

procedure. Responses with/without calculator scored as below)

(i) - (iv) each correct response = 1 point

0

1

2

3

4

33.

Sylvain Hohn Financial Delegation in Late Adulthood 8 / 34

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Research BackgroundFinancial Decision Delegation

Conclusion

Financial Risk in Late AdulthoodResearch OverviewTelephone ScreeningFinancial AssessmentDelegation Experiment

Delegation Experiment

Question 1

How do key

factors such as

education, age,

gender and

option to revoke

influence the

willingness to

transfer financial

decisions?

Cognitive

Assessment

Executive

Functioning,

Memory

Financial Assessment

Everyday financial

abilities, estate

management, etc.

Telephone Survey

Overall cognitive

functioning

Advertisement,

RecruitmentDelegation

Experiment

Willingness to

transfer decisions

Financial Assessment

Everyday financial

abilities, estate

management, etc.

Question 2

How do different

elements of

cognition relate

to Financial

Capacity (FC)?

Telephone Survey

Ability to

communicate,

dementia and

stroke screening

Question 1

How do key

factors such as

education, age,

gender and

option to revoke

influence the

willingness to

transfer financial

decisions?

Cognitive

Assessment

Executive

Functioning,

Memory

Financial Assessment

Everyday financial

abilities, estate

management, etc.

Telephone Survey

Overall cognitive

functioning

Question 2

How do different

elements of

cognition relate

to Financial

Capacity (FC)?

Advertisement,

Recruitment

Telephone Survey

Ability to

communicate,

dementia and

stroke screening

Financial Assessment

Everyday financial

abilities, estate

management, etc.

Sylvain Hohn Financial Delegation in Late Adulthood 9 / 34

Page 11: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Financial Risk in Late AdulthoodResearch OverviewTelephone ScreeningFinancial AssessmentDelegation Experiment

Example Decision-Making Task (substantial)

27. Assume that you have debts on your current credit card. You come

across another card that offers substantially lower interest rates for the

balance amount that you transfer from your old card for 6 months. New

purchases, however, attract a higher interest rate than your old card offers.

What is the best strategy in paying down the debts?

Possible answers:

× Transferring all debts to the new card and closing down the old card

account.

× Not taking the new card - steadily paying off the debts on the old card.

→ Transferring all the debts to the new card, but making purchases with

the old one only.

× Making purchases with the new card while steadily paying off the debts

on the old card.

Sylvain Hohn Financial Delegation in Late Adulthood 10 / 34

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Research BackgroundFinancial Decision Delegation

Conclusion

Financial Risk in Late AdulthoodResearch OverviewTelephone ScreeningFinancial AssessmentDelegation Experiment

No Revoke/Revoke

Question

1Answer

correct1 point

Question

2Answer

correct1 point

Question

3Answer

correct1 point

Question

4Answer

correct1 point

Question

5Answer

correct1 point

Question

6Answer

wrong0 points

Question

7Answer

correct1 point

Question

8Partner

transfer

Answer

correct1 point

Question

9Partner

transfer

Answer

wrong0 points

Question

10Partner

transfer

Answer

correct1 point

score:

8/10

RevokeNo Revoke

Question

1Answer

correct1 point

Question

2Answer

correct1 point

Question

3Answer

correct1 point

Question

7Answer

correct1 point

Question

8Answer

correct1 point

Question

9Answer

wrong0 points

Question

4Answer

correct1 point

Question

5Partner

transfer

Answer

wrong0 points

Question

6Partner

transfer

Answer

correct1 point

Question

10Partner

transfer

Answer

correct1 point

score:

8/10

Sylvain Hohn Financial Delegation in Late Adulthood 11 / 34

Page 13: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

Financial Decision Delegation

Question 1

How do key

factors such as

education, age,

gender and

option to revoke

influence the

willingness to

transfer financial

decisions?

Cognitive

Assessment

Executive

Functioning,

Memory

Financial Assessment

Everyday financial

abilities, estate

management, etc.

Telephone Survey

Overall cognitive

functioning

Advertisement,

RecruitmentDelegation

Experiment

Willingness to

transfer decisions

Financial Assessment

Everyday financial

abilities, estate

management, etc.

Question 2

How do different

elements of

cognition relate

to Financial

Capacity (FC)?

Telephone Survey

Ability to

communicate,

dementia and

stroke screening

Cognitive

Assessment

Executive

Functioning,

Memory

Financial Assessment

Everyday financial

abilities, estate

management, etc.

Telephone Survey

Overall cognitive

functioning

Question 2

How do different

elements of

cognition relate

to Financial

Capacity (FC)?

Advertisement,

Recruitment

Telephone Survey

Ability to

communicate,

dementia and

stroke screening

Sylvain Hohn Financial Delegation in Late Adulthood 12 / 34

Page 14: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

Hypothesis 1 (value of control)

Literature related to transfer of decision-making rights:

Concept of Desirability of Control is known for many years inPsychology literature (Adler, 1927) and instruments for measurementhave been developed (Burger and Cooper, 1979).

Largely overlooked in Economics but recently gained attention:

Self-Interest trough agents in ultimatum game (Fershtman and Gneezy,2001) and in dictator game (Hamman et al., 2010)Participants are willing to pay Control Premium in order to retain agencyover their choices (Owens et al., 2014; Bobadilla-Suarez et al., 2017)

Sylvain Hohn Financial Delegation in Late Adulthood 13 / 34

Page 15: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

Hypothesis 1 (value of control)

Members of the couple who have a lower Financial Capacity (FC) delegateless often than they should if their aim was to maximise financialdecision-making quality.

Sylvain Hohn Financial Delegation in Late Adulthood 14 / 34

Page 16: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

Hypothesis 2 (specialisation)

Most prominent theories of household decision-making:1 specialisation of tasks and responsibilities (Becker, 1965; 1973)2 bargaining power (including Bertocchi et al., 2014; Luehrmann and

Maurer, 2007; Dobbelsteen and Kooreman, 1997; Elder and Rudolph,2003)

⇒ Couples split household tasks such that each member is responsiblefor one or more domains.

Sylvain Hohn Financial Delegation in Late Adulthood 15 / 34

Page 17: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

Hypothesis 2 (specialisation)

One member of each couple has higher Financial Capacity (FC). Thisspecialist should make more financial decisions.

Sylvain Hohn Financial Delegation in Late Adulthood 16 / 34

Page 18: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

Hypothesis 3 (option to revoke)

Decision-making rights ri have a positive value1 p(ri ) such that∑ni=1 p(ri ) <

∑n+1i=1 p(ri )

Future events like health, workplace situation, force majeure are notforeseeable.→ Transferring decision-making rights for the future holds ambiguity.→ Presence of ambiguity increases perceived risk (Ellsberg Paradox)(Ellsberg, 1961).

1The marginal value of decision-making rights is diminishing (Iyengar and Lepper,2000; Vohs et al., 2008).

Sylvain Hohn Financial Delegation in Late Adulthood 17 / 34

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Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

Hypothesis 3 (option to revoke)

An option to revoke financial decision delegation increases the willingness todelegate.

Sylvain Hohn Financial Delegation in Late Adulthood 18 / 34

Page 20: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

Hypothesis 4 (gender differences)

Some studies find lower levels of financial literacy in women (Lusardi,2008; Fonseca et al., 2012; Elder and Rudolph, 2003).

Gender gap decreases and often disappears at the age of expectedwidowhood (Hsu, 2011).

In Australia, men are responsible for financial decision-making moreoften then women are (Johnston et al., 2015).

When women earn a higher income than their husbands, couples oftenwork together to “produce men’s dominance in a variety of ways”(Tichenor, 2015).

Sylvain Hohn Financial Delegation in Late Adulthood 19 / 34

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Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

Hypothesis 4 (gender differences)

Men are less likely to delegate to their spouse.

Sylvain Hohn Financial Delegation in Late Adulthood 20 / 34

Page 22: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

Value of Control

Participants transferring in baseline and treatment group

Transfer Rate

f m Total

No Revoke 28.13% 3.13% 15.63%

Revoke 81.25% 6.25% 43.75%

⇒ In both groups the transfer rate is less than 50%. Supports Hypothesis 1(Value of Control).

Sylvain Hohn Financial Delegation in Late Adulthood 21 / 34

Page 23: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

Transfer to Specialist

OLS: Influence of Financial Capacity on Financial Decision-Making

(1) (2)Dependent Var: Financial Decision-Making Score

FC 0.037∗∗∗ 0.025∗

(0.013) (0.013)Age -0.050∗∗ -0.050∗∗

(0.021) (0.021)Male 0.381 0.383

(0.270) (0.280)Schooling 0.057∗

(0.030)Constant 7.490∗∗∗ 7.608∗∗∗

(1.844) (1.833)

Obs. 128 118

Standard errors in parentheses; ∗ p < 0.1, ∗∗ p < 0.05, ∗∗∗ p < 0.01

Sylvain Hohn Financial Delegation in Late Adulthood 22 / 34

Page 24: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

Transfer to Specialist

Marginal Effects of Probit Estimation: Willingness to Delegate

Transfer Takes Place

Male -0.357∗∗∗

(0.051)Revoke Treatment 0.219∗∗∗

(0.056)Higher FC -0.133∗∗

(0.060)Higher Education -0.116∗

(0.065)Age -0.007

(0.005)

Observations 118

Standard errors in parentheses∗ p < 0.1, ∗∗ p < 0.05, ∗∗∗ p < 0.001

Sylvain Hohn Financial Delegation in Late Adulthood 23 / 34

Page 25: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

Transfer to Specialist

Financial capacity has impact on financial decision-making.⇒ Participants with lower financial capacity are more likely to transfer.

Years of schooling has impact on financial decision-making.⇒ Participants with less years of schooling are more likely to transfer.

Supports Hypothesis 2 (Transfer to Specialist).

Sylvain Hohn Financial Delegation in Late Adulthood 24 / 34

Page 26: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

RevokeDifferences Between Revoke and No Revoke Groups

Obs Mean 95% CI

Financial Competence No Revoke 64 59.73 56.92 62.55(1.41)

Revoke 64 58.98 56.33 61.36(1.33)

Total 128

Age No Revoke 64 72.19 70.50 73.88(0.84)

Revoke 64 70.96 69.40 72.53(0.78)

Total 128

University No Revoke 58 0.5 0.37 0.63(0.07)

Revoke 60 0.58 0.45 0.71(0.06)

Total 118

Female Set=1 No Revoke 64

Revoke 64

Total 128

Standard errors in parentheses

Sylvain Hohn Financial Delegation in Late Adulthood 25 / 34

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Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

Revoke

Participants Transferring in No Revoke/Revoke Group

questions No Revoke Revoketransferred participants total participants total1 0 0 11 112 4 8 7 143 0 0 5 04 1 4 3 125 2 10 2 106 2 12 0 07 1 7 0 0

Total 10 41 28 47

Sylvain Hohn Financial Delegation in Late Adulthood 26 / 34

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Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

Revoke

Marginal Effects of Probit Estimation: Willingness to Delegate

(1) (2)Transfer Takes Place

Male -0.434∗∗∗ -0.357∗∗∗

(0.038) (0.051)Revoke Treatment 0.256∗∗∗ 0.219∗∗∗

(0.053) (0.056)Higher FC -0.133∗∗

(0.060)Higher Education -0.116∗

(0.065)Age -0.007

(0.005)

Observations 128 118

Standard errors in parentheses∗ p < 0.1, ∗∗ p < 0.05, ∗∗∗ p < 0.001

Sylvain Hohn Financial Delegation in Late Adulthood 27 / 34

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Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

Revoke

⇒ Participants in the revoke group are more likely to delegate. SupportsHypothesis 3 (Revoke).

Sylvain Hohn Financial Delegation in Late Adulthood 28 / 34

Page 30: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

OLS: Interaction Effects Between Revoke and Selected Variables

Transfer takes place

Gender(male=1) -0.246∗∗∗

(0.086)Revoke -0.181

(0.295)Gender(male=1) × Revoke -0.399∗∗∗

(0.118)FC lower 0.219∗∗∗

(0.082)Revoke × FC lower -0.218∗

(0.114)Education Difference -0.021∗∗∗

(0.007)Gender(male=1) × Education Difference 0.026∗∗∗

(0.010)Age -0.010∗∗

(0.004)rBIS 0.026∗∗∗

(0.010)FFFS-Flight -0.099∗∗∗

(0.030)Revoke × FFFS-Flight 0.104∗∗∗

(0.039)Partner IQCODE 0.216∗

(0.120)Constant 0.331

(0.493)

Observations 118R2 0.607

Page 31: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

Gender Bias T-test of Characteristics of Male and Female Participants

Obs Mean 95% CI

Years of Schooling Female 59 13.02 12.42 13.61(0.30)

Male 59 14.18 13.55 14.81(0.32)

Total 118

Financial Capacity Female 64 59.16 56.68 61.63(1.24)

Male 64 59.56 56.59 62.54(1.49)

Total 128

Financial Capacity Female 64 0.4219 0.2975 0.5462higher (within couple) (0.0622)

Male 64 0.5781 0.4538 0.7025(0.0622)

Total 128

Age Female 64 70.58 68.98 72.18(0.8)

Male 64 72.58 70.95 74.21(0.82)

Total 128

Standard errors in parentheses

Sylvain Hohn Financial Delegation in Late Adulthood 30 / 34

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Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

Gender Bias

Marginal Effects of Probit Estimation: Willingness to Delegate

(1) (2)Transfer Takes Place

Male -0.434∗∗∗ -0.357∗∗∗

(0.038) (0.051)Revoke Treatment 0.256∗∗∗ 0.219∗∗∗

(0.053) (0.056)Higher FC -0.133∗∗

(0.060)Higher Education -0.116∗

(0.065)Age -0.007

(0.005)

Observations 128 118

Standard errors in parentheses∗ p < 0.1, ∗∗ p < 0.05, ∗∗∗ p < 0.001

Sylvain Hohn Financial Delegation in Late Adulthood 31 / 34

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Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

RevokeOLS: Interaction Effects Between Gender and Selected Variables

Transfer takes place

Gender(male=1) -0.422∗∗∗

(0.155)Revoke 0.466∗∗∗

(0.085)Gender(male=1) × Revoke -0.432∗∗∗

(0.121)FC lower 0.105∗

(0.061)Education Difference -0.019∗∗∗

(0.007)Gender(male=1) × Education Difference 0.017∗

(0.010)FFFS-Fight -0.067∗∗∗

(0.025)Gender(male=1) × FFFS-Fight 0.060∗

(0.033)Constant 0.447∗∗∗

(0.109)

Observations 118R2 0.544

Standard errors in parenthesesSylvain Hohn Financial Delegation in Late Adulthood 32 / 34

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Research BackgroundFinancial Decision Delegation

Conclusion

Development of HypothesesResults

Gender Bias

⇒ Men are less likely to delegate.Supports Hypothesis 4 (Gender Bias).

Sylvain Hohn Financial Delegation in Late Adulthood 33 / 34

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Research BackgroundFinancial Decision Delegation

ConclusionConclusion

Conclusion

Influence of key factors on willingness to delegate

Within couples financial delegation to the better financialdecision-maker is more likely.

An option to revoke can significantly increase the willingness todelegate financial decisions.

Men are less likely to delegate financial decisions, even though onaverage they are not better financial decision makers.

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Page 36: Financial Delegation in Late Adulthood · Financial Risk in Late Adulthood Research Overview Telephone Screening Financial Assessment Delegation Experiment Research Background Financial

Research BackgroundFinancial Decision Delegation

ConclusionConclusion

Thank you for your attention :)

Questions please?

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