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Title:	Relative social standing as a determinant of wealth accumulation - an experimental approach among the youth in Malaysia
Authors:	Poh Boon Liang @ Poh Boon Lian (P54219)
Supervisor:	Nor Ghani Md Nor, Prof. Dato Dr.
Keywords:	Youth -- Malaysia -- Conduct of life Youth -- Malaysia Universiti Kebangsaan Malaysia -- Dissertations Dissertations, Academic -- Malaysia
Issue Date:	18-Jun-2020
Description:	Given the ongoing trend of bankruptcy amongst Malaysian youth, reference group and social media are becoming relevant to encourage and stimulate better saving behaviour. The effect of saving on wealth accumulation so far has been recognized empirically through social psychology studies. This study enriches the existing literature to further capture the behavioural change of saving within the context of experimental economics. Instead of the popular life cycle hypothesis, this study introduces the term 'relative social standing' (RSS) to emphasise the direct relevance of reference group on saving as a determinant for wealth accumulation. RSS measures how comparison with reference group can motivate individuals to devote more effort and resources to wealth accumulation. The objectives of the study are twofold - firstly, to demonstrate that one of the motives of saving is for wealth accumulation; secondly, to examine the effect of the reference group affecting wealth accumulation. For the empirical investigation, the RSS measurement captures the effect of comparison with reference group using a physical game. The study refers to this experimental game as the Silver Digger Challenge. The purpose of the experiment is to demonstrate that comparison with reference group affects wealth accumulation. Within the experiment, participants are assigned randomly to either a control or a treatment group. Treatment group participants are asked to compare themselves with a referent of their choice. The participant would indicate their expectation before viewing the actual score; then decide whether the referent's score was within their expectation on a 5-point Likert scale. Meanwhile, control group participants proceed with the game without viewing anyone's score. At the end of the game, the total scores obtained are compared between the two groups. Any difference in outcome is attributed to the effect of comparison with reference group i.e. the RSS effect. Since time element is involved in saving for wealth growth, saving behaviour among young people becomes relevant for research. This study, therefore, takes undergraduates and postgraduates students from the National University of Malaysia as a sample for investigation. The study finds that savers consistently save to generate more wealth. Secondly, the finding demonstrates comparison of scores with the referents contributes to the total coins accumulated is statistically significant. It is because the expectation of the participant on the referent's score is found statistically significantly correlated with the scores of the participants. Overall, these findings lend support to the RSS effect; that the comparison with reference group does indeed affect devotion of efforts and resources to increase wealth through a more consistent saving behaviour. This research is significant in showing that youth should practice saving to build more wealth. In terms of policy implications, the government should provide more detailed data on saving and wealth (especially through peer-shared social media), classified to demographical characteristics e.g. age and gender in order to motivate young people to cultivate saving practice through reference group effect. Another implication is to encourage the government to further ensure that the mandatory saving in the current system is sufficient for their population's future retirement. In conclusion, saving leads to wealth accumulation which is able to provide a more prudential and secured retirement life of a nation with a growing aging population.,Ph.D.
Pages:	295
Call Number:	HQ799.M4P634 2020 tesis
Publisher:	UKM, Bangi
Appears in Collections:	Faculty of Economy and Management / Fakulti Ekonomi dan Pengurusan

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