Propensity toward indebtedness: An analysis using behavioral factors

This study aims to construct a model of propensity toward indebtedness using behavioral factors from 1046 inhabitants in Santa Maria (RS), Brazil. A questionnaire comprising 90 questions was administered. The questionnaire addressed demographic and cultural variables and seven behavioral factors: financial literacy, risk perception, risk behavior, emotion, materialism, indebtedness, and money-related values. Results indicate high risk perception, conservative risk behavior, and low levels of indebtedness and materialism. The tests reveal a significant difference in the level of debt according to age, gender, marital status, education, religion, religious principles, occupation, family income, credit card, and dependence on credit. In structural equation modeling, eight of the 10 original hypotheses are confirmed and three new ones inserted. The results also indicate positive influences from the constructs materialism and risk behavior and negative influences from the constructs risk perception, emotion, and value of money.