Determinants of generation Y (Gen Y) saving behaviour: An application of the integrated behavioural model / Ida Lopez Augastin Pathrose Lopez

Ida Lopez , Augastin Pathrose Lopez (2023) Determinants of generation Y (Gen Y) saving behaviour: An application of the integrated behavioural model / Ida Lopez Augastin Pathrose Lopez. PhD thesis, Universiti Malaya.

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Abstract

The issue of saving behaviour is an important research agenda and has often been a key topic of discussion among researchers and policymakers across the globe. This issue is expected to gain greater importance in the coming decades due to longer life expectancies, intensified with countries having to deal with ageing populations and significant increase in old-age dependency ratio. The main objective of this study is to investigate the determinants of saving behaviour among Malaysia’s income-earning Gen Ys – born in the years 1980 to 1995 - using Integrated Behavioural Model (IBM). Gen Y is chosen as it is a fast-growing income-earning generational cohort, and with considerable number of working years left before retirement. Another motivation to target Gen Y is because prior studies revealed Gen Ys to be experiencing financial stress and anxiety and are not prepared for long-term financial security. This study applied the IBM, which primarily includes constructs from Theory of Planned Behaviour (TPB) to evaluate determinants influencing Gen Y’s saving behaviour, namely, whether Attitude (experiential, instrumental), Perceived Norm (injunctive, descriptive), and Personal Agency (perceived Control, self-efficacy) influence intention to save regularly. In addition to intention to save regularly as a direct predictor of regular saving behaviour, this study includes two additional direct predictors of saving behaviour, namely financial literacy, and time preference. The study was conducted in three phases. In the first phase, interviews were conducted to elicit underlying beliefs that influence Attitude, Perceived Norm, and Personal Agency. In the second phase, a study using survey questionnaire was conducted on a sample of 500 Gen Y respondents. Analysis conducted using PLS-SEM revealed that there were positive relationships among Instrumental Attitude, Injunctive Norm, Perceived Control, Self-efficacy, and intention to save regularly. Only for Experiential Attitude and Descriptive Norm, significant relationships were not found. As for the direct predictors of regular saving behaviour, intention to save regularly, time preference, and financial literacy were all found to have significant positive associations with regular saving behaviour. In the third phase, an experimental study to investigate the impact of participating in an online financial awareness programme revealed that such an intervention positively impacts the path coefficients of Instrumental Attitude and Self-efficacy to intention to save regularly. This study’s theoretical contribution is it uses an Integrated Behavioural Model to explain performance of regular saving. It incorporated six predictors of intention to save to identify the predictive power of each, instead of the standard three predictors of intention in TPB. In addition, there are three predictors of regular saving behaviour. A further contribution of this study is in the conduct of three phases of data collection. Policy makers may find this study useful as the results reveal the determinants of saving behaviour of Gen Ys in Malaysia, and policies could then be formulated to improve Gen Y’s saving behaviour. For education and programme providers, this study showed that financial awareness programmes could be effective in promoting regular, long-term saving behaviour through the enhancement of Instrumental Attitude and Self-efficacy among Gen Ys in Malaysia.

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