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Psychological and Demographic Factors Affecting Relationships with Financial Institutions

This study focuses on the effect of the aging process on consumers’ demand for financial services. The research develops a battery of measures to assess various dimensions of the aging process and uses a demographic inventory to profile respondents.

Executive Summary

This report is the second in a series of reports from Professor Lawrence R. Lepsito's ongoing research project that studies changes occurring as people age and assesses how such changes influence consumer behavior. Most studies on consumer behavior present a "snapshot" of consumer attitudes and behavior at the specific time the consumers are interviewed. In contrast to these studies, Lepsito's research is designed as a "longitudinal" study. He is studying behavior of the same 2,450 consumers over the course of their life spans. These consumers were surveyed in 1991 and will be surveyed again every four years. His project's combination of longitudinal methodology, aging-related variables, and consumer financial behavior, "trigger points" in people's lives that cause a shift in financial consumer behavior, and other relationships that will help forecast consumer financial behavior. 

What is this research about?

Whereas the first part of this series focused on only financial consumer behavior, the major focus of this study relates to the aging process. Therefore, a battery of measures was developed to assess various dimensions of the aging process, and a demographic inventory was used to profile respondents. Special attention is given to examining the dimensions of financial consumer behavior across age levels. In addition, since substantial research has documented aging differences between men and women, that analysis over age levels also includes gender differences.

What are the credit union implications?

The findings in this research reinforce the importance of studying the effects of aging on consumer behavior toward financial institutions. An unanswered question relating to these age-related findings whether younger consumers will evolve perceptions and behavior as they are that are similar to those of today's older consumers. Younger consumers have been raised in very different circumstances than older generations. Consequently, they could show different perceptions and expectations, leading to different behavior toward financial institutions. Tracking generational behavior in a longitudinal fashion over time through future surveys will provide insight into these age-related issues and better prepare credit unions to meet the changing needs of their members. 

This report was sponsored by The Center for Credit Union Research at the University of Wisconsin—Madison.

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