Working Paper: NBER ID: w23945
Authors: Arna Olafsson; Michaela Pagel
Abstract: We analyze attention to personal financial accounts using panel data that includes logins, spending, income, balances, and credit limits. We find that income arrivals cause individuals to log in and that attention is positively correlated with cash holdings and liquidity, is negatively correlated with consumer debt holdings, and increases when bank account balances change from negative to positive. We discuss how our findings relate to theories of rational and selective inattention and conclude that ostrich effects in a personal finance context, i.e., the fear of paying attention to bank account balances, is a more widespread phenomenon than previously thought.
Keywords: Selective Attention; Personal Finance; Income; Spending; Liquidity
JEL Codes: D14; D90; G41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| income arrivals (E25) | logins to financial accounts (G21) |
| cash holdings (E41) | attention to financial accounts (F30) |
| consumer debt holdings (G51) | attention to financial accounts (F30) |
| account balance shift from negative to positive (F32) | attention to financial accounts (F30) |