Elder financial abuse is an alarming problem in this era of aging population. Baby boomers are entering retirement with a higher life expectancy and more wealth than any generation before them. The combination of mental decline and substantial wealth renders many seniors vulnerable to overreach. Empirical studies suggest that financial abuse against seniors is hard to detect and likely prevalent. In private suits alleging elder financial abuse, courts often apply the mental capacity doctrine to avoid seemingly exploitative contracts, gifts and many other lifetime transactions. The formal rationales for avoidance are that the elderly party to the impugned transaction lacked mental capacity, and that the transaction was inequitable. Moreover, guardians and attorneys who manage property for the elderly may have perverse incentives to exploit their position. Presuming the worst from the property manager, courts and legislatures typically impose onerous fiduciary duties to minimize conflicts of interest and deter misconduct. Orthodox fiduciary law explicitly aims to overdeter. This Dissertation first argues that the mental capacity doctrine in prevailing American law is ill-suited for the era of aging population. In theory, the doctrine grants a mentally-incapable individual a power to choose whether to avoid her transactions. In reality, that power is usually exercised by a claimant who expects to inherit from the incapable individual. Prevailing doctrinal theories overlook the possibility that the claimant may seek to avoid a transaction to increase her expected inheritance rather than to advance the interests of the incapable individual. The mental capacity doctrine thus poses a heighted risk of avoiding transactions that actually benefited potentially incapable seniors and reflected their testamentary intent. This harms the welfare of many seniors by unduly limiting their ability to benefit their close relatives and friends, reward informal caregiving, and recruit their preferred caregivers. The mental capacity doctrine can nonetheless be reformulated to offer appropriate protection against elder financial abuse without undue intrusion into close families and personal relationships. In particular, when applied to transactions involving close relatives and friends, the doctrine should be narrow, determinate, and respectful of individual will and preferences. This Dissertation further argues that orthodox fiduciary law is too strict on most guardians and agents who manage property for the elderly. The problem is that mental or physical decline is common among seniors, but a lack of mental capacity typically stultifies the power to authorize a fiduciary to depart from adherence to strict fiduciary duty. By contrast, mentally-capable individuals are free to discharge those aspects of fiduciary law that they find intrusive and undesirable. In other words, while fiduciary law is mostly a default law when applied to capable individuals, it is a mandatory law when applied to elderly incapable individuals. Harming the welfare of many seniors, mandatory application of fiduciary law tends to stultify the pursuit of valuable other-regarding preferences in close families and personal relationships. Such strict and inflexible application further disregards the presence of intrinsic bonds and informal norms. To remedy these shortcomings, this Dissertation proposes a substituted-judgment defense to permit those departures from strict fiduciary law that the incapable individual would have authorized if she was mentally-capable. This defense should be made available to close relatives and friends but not to profit-driven professionals. To deter and sanction elder financial abuse by professional guardians and agents, this Dissertation also proposes reforms to harness their reputational concerns.

The first chapter of this thesis is motivated by a puzzle in consumer finance. In high-stakes financial decisions, people leave a substantial amount of money on the table, even when financial education is available. The ubiquity of financial choices makes understanding the effects of incentives and education on mistakes crucial. This chapter experimentally examines the impact of changes in incentives and educational availability on incentivized but hypothetical healthcare choices using Amazon Mechanical Turk. We find that increasing incentives are ineffective in increasing decision-making effort, even when these changes are made clear and salient to the subjects. Yet, surprisingly, despite this lack of effort response, subjects' choices improve when incentives are high. This result highlights an under-appreciated channel of incentives: when stakes become larger, often, the problems become simpler too. We next investigate the effect of available education. Overall, education leads to an increase in decision-making effort and an improvement in choice quality. However, this average effect masks significant heterogeneity across incentive treatments. Subjects are willing to put in the educational effort when either the problems are hard or mistakes are highly costly, but the return of the educational effort is zero for hard problems and positive for easy ones. Thus, only when stakes are high and the problem is easy does education have an effect. These findings suggest that people can be encouraged to get education for high-stakes decisions, and policy-makers have a role in simplifying problems to translate the extra effort into better choices. The second chapter dives deeper into the "easiness" channel of incentives. This chapter uses an experiment to disentangle "easiness" from the standard incentives on savings account choices, again using Amazon Mechanical Turk. We show that increasing the variance of the accounts improves choices without increasing time spent. This is true in both between-subject and within-subject analyses. Besides, we re-investigate the effects of incentives and education. We recover the usual effects of incentives, where paying subjects a higher rate motivates them to spend more time and do better. We also find that easiness and incentives complement education. Consistent with the literature, we show that the effectiveness of education diminishes with time, suggesting that education should be provided as and when people make decisions. In the third chapter finds experimental evidence for preference for flexibility (PFF). Although PFF is very intuitive, documenting PFF experimentally faces challenges from stochastic choices. Because there are random noises in decision-making, experimental data may over-estimate PFF due to such randomness. This chapter tackles stochastic choices by first deriving theoretical upper bounds for PFF. We then measure PFF against these upper bounds using menu choices presented in the Multiple Price Lists (MPLs) in a lab experiment. We find that subjects exhibit more PFF than what can be explained by random noises. Specifically, there are more PFF than two countervailing behaviors, indifference and preference for commitment. We then present two alternative models for PFF, which have different predictions for the effect of the probability of payment on PFF. We suggest a modified experiment to tell these two models apart for future research.

Originally, the focus of this project was to be a policy analysis and survey of the new procedures and regulations established by the state of Oregon for the protection and management of nursing home residents' Personal Incidental Funds (PIF). The analysis was to be divided into four phases, according to a pre-planned timetable. The last phase was to be a field survey of the policy's impact upon nursing homes and adult service workers. The timetable was synchronized with that of the Congregate Care Consultant from the Public Welfare Division's (PWD) Adult Services Unit, whose responsibility it was to develop and write a new policy for the state. Although the PIF is a miniscule segment of the total policy which the state of Oregon has developed for nursing facilities, it is submitted here as representative of public policy formulation in that area.

This dissertation includes three papers examining financial long-term care planning among low-income aging adults and the consequences of Medicaid policies like estate recovery. Paper one considers Medicaid estate recovery and its impact on Medicaid enrollment and homeownership among low-income adults age 65 and older. Paper two examines the estate planning and wealth transfer behaviors of a cohort of older adults newly enrolled in Medicaid. Finally, paper three presents a case study of Medicaid estate recovery in North Carolina. Collectively, these three papers find that Medicaid policies that target older adults may be having disparate effects depending on socioeconomic status, race, and rurality and exacerbating disparities in intergenerational transfers of wealth while recouping little for state Medicaid programs.

This study was designed to empirically test a conceptual model and measurement of financial well-being as a function of (a) personal characteristics; (b) objective attributes, quantitative indicators of the financial domain and financial management behaviors of respondents; (c) perceived attributes, subjectively assessed life conditions and perceptions of financial situation; and (d) evaluations of financial situation using various reference points as standards of comparison. Two sub-problems were investigated in the study: (a) Which group of attributes, personal characteristics, objective attributes, perceived attributes, or evaluated attributes, significantly explains variance in perceived financial well-being?; and (b) Which individual attributes significantly explain variance in perceived financial well-being? A mail survey was conducted from October of 1989 through January of 1990 with a randomly selected sample of Virginia citizens (N = 1,500). After an initial mailing and two follow-up mailings, 529 questionnaires were returned of the 1,450 that were received by respondents, providing a 36.5% total return rate (529/1,450). Twenty-three questionnaires were blank or unusable, yielding a useable return rate of 34.9% (506/1,450). Demographic characteristics of the sample were similar to those of the population of Virginia citizens. Financial well-being, as measured by an adaptation of Cantril's (1965) 11-point self-anchoring striving scale, was the dependent variable. All of the independent variables regressed on the dependent variable produced an R 2 of .71, which was statistically significant (p < .01). Removing each group of attributes individually from the regression equation resulted in a significant (p < .01) decrease in the resulting adjusted R2s as computed by F ratios. All attribute groups were determined to be essential to the measurement of financial wellbeing. Individual variables with a significant t ratio (p < .05) were the Perceived Attribute Index, Index of Well-Being, and full-time employment status. The results of the study supported the conceptual model. Results clearly verified the measurement of financial well-being as a function of personal characteristics, objective attributes, perceived attributes, and evaluated attributes. / Ph. D.

The purpose of this study is to determine what factors make it necessary for teachers to seek credit, how the credit needs of teachers are now being met, and possible solutions for the problems that exist because of these conditions.

The problem for this study consists of determining what a wife should know about family finances in order to share the burden of family living with her husband and for protection against the probability she may be left with all the responsibilities and decisions.

M. Tech. Business Administration / The aim of this research is to investigate the extent of mobile banking usage among low-income people in Johannesburg. A descriptive design was conducted; data by means of a survey, using self-administered questionnaires, was collected from the inhabitants of the informal settlements of Tembisa and Alexandra Townships in Johannesburg. This represented a total population of about 6000 households. From which, a sample of 200 households was systematically selected randomly.

This study seeks to show that a higher usage of debt instruments by consumers with limited available funds leads to the usage of savings tools to finance debt costs, which subsequently results in lower levels of savings. This was espoused by the literature on PFM and also proven by the test results from the research hypotheses that were computed by means of a logistic regression. The test results showed that there is a statistically significant relationship between the usage of debt instruments and the usage of savings tools. An emphasis is placed on the importance of savings as an integral component of the PFM concept: it is namely seen to be indispensable to good financial planning to ensure current and future consumer financial security. Therefore, this study concludes by highlighting the importance of consumers’ financial- management skills in minimising debt costs to increase levels of savings by controlling higher consumption expenditure through debt. / Business Management / M. Com. (Business management)

Thesis (MDevF (Business Management))--University of Stellenbosch, 2010. / ENGLISH ABSTRACT: In the realm of consumer behaviour research, discussions regarding materialism – commonly defined as the desire to consume – indebtedness and low-income consumerism have become almost unavoidable. This is to be expected in a society where spending patterns are constantly evolving, levels of indebtedness are steadily increasing and interest in the so-called ‘bottom of the pyramid’ consumers has been heightened. In South Africa, studies have found changes in consumption and credit usage to not only be significant, but also particularly relevant amongst low-income consumers. While this changing culture of consumption has been widely acknowledged, there has been little empirical research on consumer behaviour in South Africa and even less on low-income consumerism. For this reason a study was developed, which sought to explore the relationship between materialism and indebtedness among a sample of low-income, instalment paying consumers of South Africa’s leading catalogue retailer. Through use of a mailed self-completion survey questionnaire, consumers of the targeted retailer were asked to indicate their level of materialism, as measured using a materialism scale, and to report their level of indebtedness, measured as the number of retail store accounts held. In addition, key demographic data, consisting of the respondents’ age, gender and monthly income, was drawn from the retailer’s database. Using this data the study assessed whether (i) the sampled consumers displayed strong characteristics of materialism and (ii) whether materialism is a significant variable in predicting the sampled consumers’ propensity for incurring debt. Data analysis techniques applied in this study included tests to measure the reliability of the materialism scale as well as a variety of descriptive and inferential statistical tools, designed to identify relationships in the collected data. Using these techniques, this study found that sampled low-income consumers are indeed highly materialistic, with levels of materialism observed in this study being significantly higher than in a previous materialism study where a low-income earning consumer sample was used. Regarding levels of indebtedness, regression and correlation analysis performed suggested the presence of statistically significant relationships between consumers’ levels of indebtedness and each of the demographic variables of age and gender. However, materialism and monthly income was not found to be significant variables in determining a consumer’s level of indebtedness. While the decision to delineate this study based on the consumers of one particular retailer limits the extent to which findings can be generalised to the larger South African population, the results do provide a number of important insights, which contributes to the scant body of literature on low-income consumer behaviour in this country. / AFRIKAANSE OPSOMMING: Op die navorsingsveld oor verbruikersgedrag het die gesprek rondom die voorkoms van materialisme (wat gewoonlik gedefinieer word as die behoefte om te verbruik), verbruikersdruk en die skuldlas onder lae inkomstegroepe byna onvermydelik geword. Dit is te verwagte in ’n samelewing waar bestedingspatrone voortdurend ontwikkel, skuldlasvlakke aan die groei is en die belangstelling in verbruikers op die onderste vlak van die sogenaamde piramide verskerp het. Studies in Suid-Afrika dui aan dat, onder lae inkomste verbruikers, die verskille in verbruikersgedrag en kredietgebruik nie net opvallend nie maar ook besonder ter saaklik is. Hoewel die verandering in verbruikerskultuur rondom besteding reeds wyd beskryf is, is daar nog nie veel empiriese navorsing oor verbruikersgedrag gedoen nie – en nog minder onder lae inkomstegroepe. Dit is om hierdie rede dat ’n studie ontwerp is om die verhouding tussen materialisme en skuldlas te ondersoek onder ’n steekproef van lae inkomste huurkoopverbruikers van Suid-Afrika se grootste kataloguskleinhandelaar. Daar is gebruik gemaak van ’n vraelys vir die opname, wat aan die verbruikers gepos is en deur hulle ingevul is. Verbruikers is gevra om die vlak van hul materialisme aan te dui, soos gemeet volgens die gebruik van ’n skaal of maatstaf vir materialisme; en om hul skuldlas weer te gee, gemeet aan die aantal rekeninge wat hulle by kleinhandelwinkels het. Belangrike demografiese data, soos die respondente se ouderdom, geslag en maandelikse inkomste, is verkry uit die kleinhandelaar se databasis. Hierdie data is gebruik om te bepaal, (i) of die steekproefverbruikers ’n sterk neiging tot materialisme toon, en (ii) of materialisme ’n beduidende rol speel in die voorspelbaarheid van die mate waartoe die steekproefverbruikers hulle aan skuld sal blootstel. Tegnieke wat in die studie gebruik is vir data-analise sluit toetse in wat die betroubaarheid van die maatstawwe vir materialisme meet, asook ’n aantal beskrywende en afleibare statistiese metodes wat ontwerp is om verhoudings in die versamelde data te identifiseer. Deur die gebruik van hierdie tegnieke het die studie gevind dat hierdie steekproef van lae inkomste verbruikers inderdaad hoogs materialisties is, en dat die vlakke van materialisme wat waargeneem is, beduidend hoër is as wat gevind is in ’n vorige studie onder ’n steekproef van lae-inkomste verbruikers. Met betrekking tot skuldlasverpligtinge, het die regressie- en korrelasie-analise wat gedoen is die bestaan van statisties beduidende verhoudinge tussen verbruikers se skuldlasvlakke en die demografiese veranderlikes van ouderdom en geslag aangedui. Daar is egter gevind materialisme en maandelikse inkomste is nie beduidende veranderlikes in die bepaling van ’n verbruiker se skuldlas nie. Hoewel die ontwerp van hierdie studie om verbruikers van slegs ’n enkele kleinhandelaar in te sluit ’n beperking plaas op die toepasbaarheid van die bevindinge op die wyer Suid-Afrikaanse bevolking, het die resultate ’n aantal belangrike insigte verskaf wat bydra tot die klein hoeveelheid bestaande literatuur oor lae inkomste verbruikersgedrag in die land.