Bio: Scott Baker

Scott Ross Baker is an Associate Professor of Finance at the Kellogg School of Management and is a Research Fellow at the National Bureau of Economic Research. His research is concentrated in empirical finance and macroeconomics. He is currently engaged in a variety of research projects regarding household financial choices and the measurement of consumption, as well as research regarding the effects of policy uncertainty on financial markets and growth.

Scott joined the Finance Department at Northwestern’s Kellogg School of Management in July 2014. He was born and raised in San Diego, California and received B.A.’s in Economics and Political Science from the University of California, Berkeley in 2007. He received a Ph.D. in Economics from Stanford University in June 2014.

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Bio: James Poterba

James Poterba is the Mitsui Professor of Economics at MIT and the President of the National Bureau of Economic Research, a non-profit research organization with nearly 1600 affiliated economists.  He has served as President of the Eastern Economic Association and the National Tax Association, and as vice president of the American Economic Association.  He is a member of the National Academy of Sciences.

Dr. Poterba’s research focuses on how taxation affects the economic decisions of households and firms, particularly those involving saving and portfolio behavior.  His recent research has analyzed the determinants of retirement saving, the draw-down of assets after households reach retirement, and the role of tax-deferred retirement saving programs such as 401(k) plans in contributing to retirement security.

Dr. Poterba is a trustee of the College Retirement Equity Fund (CREF), the TIAA-CREF mutual funds, and of the Alfred P. Sloan Foundation. He holds an undergraduate degree from Harvard College and a D. Phil. in Economics from Oxford University, where he was a Marshall Scholar.

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Recent declines in long-term real interest rates raise new challenges for both the accumulation and the draw-down of retirement resources. These challenges confront both defined benefit and defined contribution pension plans, and if sustained, they are likely to prompt responses on many margins: the saving rate of the working population, the length of working lives, and the structure of old age support programs. This presentation will explore the effect of a decline in the rate of return available to retirement savers on the connection between saving behavior and retirement wealth.  It will also draw on administrative data from TIAA, a large and mature defined contribution pension system, to describe time series variation in the choice of draw-down strategies for savers who reach retirement with an accumulated pension balance. Changes in available rates of return may affect both the amount of wealth available at retirement, and the likelihood of choosing to purchase an annuity with some or all of that wealth.

Bio: Eesha Sharma

Eesha Sharma is Associate Professor of Business Administration at the Tuck School of Business at Dartmouth College. Professor Sharma’s research revolves around consumer financial wellbeing, and how psychology and marketing can be used to understand and improve it. She is particularly interested in how people react to perceived scarcity, poverty, and deprivation—both in their own lives and in the lives of others. Using behavioral experiments and field studies, she examines topics such as: how people behave when they feel poor, why people give to charity, and what factors may improve and/or worsen consumer financial decision making. Her work has been published in journals including Journal of Consumer Research, Journal of Consumer Psychology, and Organizational Behavior and Human Decision Processes. She earned a BSc in Finance and Marketing, an MPhil, and a PhD in Marketing at the NYU Stern School of Business. Prior to academia, she worked as an investment banking analyst in the Financial Institutions Group (FIG) at Goldman Sachs.

Abstract

The current research introduces the concept of psychological ownership of money, the notion that consumers perceive money in differing degrees as their own. We suggest that this concept is particularly important in the realm of consumer debt, where consumers use borrowed money. We show that individuals naturally vary in the extent to which they experience psychological ownership of money, and variation on this dimension predicts willingness to borrow for discretionary purchases. Moreover, this construct is distinct from other individual-level factors such as debt aversion, financial literacy, income, intertemporal discounting, materialism, propensity to plan, and self-control, and it predicts willingness to borrow above and beyond these factors. We further show that psychological ownership of borrowed money is shaped by context. Specifically, we document systematic differences in psychological ownership across debt types that can be used for discretionary purchases, and show that these differences explain consumers’ interest in borrowing. Finally, we find that differences in psychological ownership manifest in online search behavior, and can be leveraged to predict patterns of online search behavior for different debt types.

Bio: Meina Banh

Meina Banh brings over a diverse set of policy experiences having worked in various positions within federal agencies, Congress, and nonprofit organizations. She is currently a Senior Policy and Innovation Advisor at the Consumer Financial Protection Bureau (CFPB) where she leads the work on youth financial education research and evidence. Prior to that, she advised the Director of the Bureau on financial education matters. Meina also spent time at the US Small Business Administration and on Capitol Hill. Before coming to Washington DC, Meina spent a number of years working at a number of non-profits on community development and economic growth issues. She graduated from the University of California, Los Angeles with a Master’s in Public Policy and a Bachelor of Arts in Political Science and Sociology.

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Bio: Cindy Soo

Cindy Soo is an Assistant Professor of Finance at the University of Michigan Ross School of Business, where she teaches real estate finance. Her research interests include household finance, real estate, and behavioral economics, and particularly focuses on understanding what impacts the financial decision making of low income borrowers. Cindy received a PhD from the University of Pennsylvania in 2013 and BA from Emory University in 2005.

Abstract

This paper isolates the causal impact of neighborhood environment on low-income credit decisions by analyzing the participants of the Moving to Opportunity (MTO) experiment. MTO was a unique, large-scale experiment that offered families vouchers to move to better neighborhoods via randomized lottery. We find better neighborhood environments lead to increased credit access and use, with the largest impacts concentrated among participants who were required to move to the lowest poverty areas as young children. We find adults who received vouchers but were allowed to move to neighborhoods of their choice experience the greatest improvements in delinquency and debt behaviors.