Impact of Wealth on Inattention: Evidence from Credit Card Repayments. FDIC Center for Financial Research Working Paper No. 2008-10

摘要

Inattentive decision makers do not make full use of information available to them. Existing, psychologically based, explanations for inattention include the impact of competing stimuli and the salience of the decision. These existing explanations, however, do not predict whether richer or poorer individuals are more likely to be inattentive, since either can face competing demands on their limited supplies of attention. We examine this issue using a confidential credit card database of more than one million data points. We document that a proportion of individuals who are delinquent have sufficient surplus funds on deposit, implying that these individuals could have avoided the costs of delinquency if they had been more attentive to their credit card repayments. Using various measures of income and wealth, we provide strong evidence that these inattentive individuals are more likely to be poorer.