On Impulse: The Role of Impulsivity in Financial Scarcity and Risk Preference

Lesser possession of financial resources greatly impacts livelihood and well-being. This state of scarcity manifests itself in individuals through alterations in cognitive functioning and decision-making. This situation affects individual on different levels, depending on available resources and contextual means. This research is concerned about the role of personality traits, particularly impulsivity, on decision-making under situations of scarcity. Prior research has found that impulsivity affects decision-making, manifesting itself in rash action and impulsive behavior. Here, we apply these findings and discuss the degree of impulsivity and its moderating role in the relationship of financial scarcity and risk preference. This effect was investigated through a multiple-scaled questionnaire. One task, the lottery choice task, and two scales, the Psychological Inventory of Financial Scarcity (PIFS) and a shortened version of the Barratt Impulsivity Scale (BIS-15), were administered...Show moreLesser possession of financial resources greatly impacts livelihood and well-being. This state of scarcity manifests itself in individuals through alterations in cognitive functioning and decision-making. This situation affects individual on different levels, depending on available resources and contextual means. This research is concerned about the role of personality traits, particularly impulsivity, on decision-making under situations of scarcity. Prior research has found that impulsivity affects decision-making, manifesting itself in rash action and impulsive behavior. Here, we apply these findings and discuss the degree of impulsivity and its moderating role in the relationship of financial scarcity and risk preference. This effect was investigated through a multiple-scaled questionnaire. One task, the lottery choice task, and two scales, the Psychological Inventory of Financial Scarcity (PIFS) and a shortened version of the Barratt Impulsivity Scale (BIS-15), were administered and utilized for the analysis. A total of 100 participants based in United Kingdom were involved in the questionnaire. The results yield no significance between impulsivity and the relationship of financial scarcity and risk preference. Future research may look deeper into cultural differences and biases that may be involved in the decision-making process, as well as looking into different instruments that measures the trait impulsivity itself.Show less

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On Impulse: The Role of Impulsivity in Financial Scarcity and Risk Preference