Abstract:
A vast recent literature in the area of behavioral economics has investigated how poverty affects financial decision-making, considering cognitive biases in the individual decision-making process. In Brazil, there are very few empirical studies that address the influence of cognitive biases on poor families' decision-making. This paper aims to empirically assess how poor families make savings decisions. Field research carried out from an intentional non-probabilistic sample in rural settlements in the northern state of Tocantins. As a strategy for data collection, semi-structured interviews were conducted with heads of the family unit. It is concluded that the low capacity to aspire and the present bias, enhanced by the condition of poverty, severely compromise the ability to save and make decisions regarding the future of these families. Their choices perpetuate their condition of poverty. In this way, some lessons and suggestions are extracted from the study to deepen future research and improve policy design.
Keywords:
intertemporal choice; savings; rural poverty
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