MULTIVARIATE STATISTICAL MODELLING OF ECONOMIC DECISION-MAKING: QUANTIFYING MINDFULNESS, RISK PREFERENCES, AND COGNITIVE FACTORS
DOI:
https://doi.org/10.69980/mmkwfn83Keywords:
mindfulness, economic decision-making, risk preference, financial literacy, cognitive reflectionAbstract
There are various cognitive, psychological and behavioural factors that interact in economic decision-making, but the combined effect of mindfulness, risk preferences and cognitive factors is not fully understood. Using data from 645 respondents, this study employed a multivariate statistical approach to assess the relationships between mindfulness, risky economic choice, delayed-reward preference, financial literacy, cognitive reflection, impulsivity and trust. A 39-item composite mindfulness scale was used for measuring mindfulness, and a structured decision measure and question-based measures for economic preferences and cognitive-behavioural factors were used. Descriptive statistics, Spearman correlations, Kruskal–Wallis tests and multivariable regression models with HC3 robust standard errors were used. Mindfulness was positively associated with financial literacy and cognitive reflection and negatively associated with impulsivity. The mindfulness scale demonstrated good internal consistency, whereas the impulsivity measure showed moderate internal consistency. The link with risky lottery decisions or delayed reward preference, however, was not significant nor was it linked to mindfulness. At bivariate level, financial literacy was negatively associated with risk taking and positively associated with patience. Significant differences in financial literacy, cognitive reflection and impulsivity were found across tertiles of mindfulness, while risky choice and patience were not significantly different. However, in models that controls for psychological factors, only impulsivity significantly predicted fewer delayed-reward selections, with higher levels of impulsivity predicting fewer choices. Mindfulness was generally more closely linked with cognitive and self-regulatory factors than with actual economic preferences, and this suggests the need for an integrated multivariate treatment of the understanding of individual economic decision-making.
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