What induces--or pressures--people into saving their money? One possible answer is the influence of peer networks on perceptions of “good saving” practices. Martina Raue, a Postdoctoral Associate at the MIT AgeLab, has implemented a study that looks at the influence of peer-based information on participants’ hypothetical savings behaviors. Dr. Raue writes:
“With increasing longevity, future retirees will need to plan and save for a longer older age, but people often struggle to be actively engaged in planning for their future. The perceived uncertainty of the future, but also uncertainty around financial planning, may be reasons for these struggles. In uncertain situations, people ask others for advice, and the peer group is one important source of information. Following the behavior of others, making social comparisons, and conforming to social norms guide our behavior and reduce uncertainty. Can people’s need to compare themselves with others and their interest in competition encourage financial planning?”
Dr. Raue, Lisa D’Ambrosio, and Joseph Coughlin have created an in-depth graphic describing the research. A longer-form academic paper on the study’s findings is forthcoming.