Michigan State University

MSU Author Spotlight: James Ming Chen

Benjamin Hall

What is "responsible financial consumption behavior"? 

Caution: It is very hard to define.

Financial decision-making is complex. There are many motivations which affect purchase behaviors. In order to understand and measure consumption behavior and financial decision-making, MSU author James Ming Chen investigated the interplay of attitudes, behavioral control, and financial literacy. Chen's research, published (2019) in the International Journal of Consumer Studies, confirms the following:

"Consumers want enough money to buy the things they like, pay all their financial liabilities on time, live in accordance with their financial capacity, anticipate and plan for their future income and expenses, achieve their financial goals, save for emergencies and so forth."

Further, Chen's findings imply that "knowledge by itself is not enough; the right attitudes make the actual difference."

What are those attitudes? 

Chen and colleagues defined their model for responsible financial consumption behavior under six qualifying dimensions:

  • I live in accordance with my financial possibilities

  • I pay my monthly bills before or on their due date

  • I try to anticipate and plan future financial income and expenses

  • In everyday purchases of consumer goods, I am informed to make rational decisions that are in line with my financial possibilities 

  • I try to be informed and educated in the field of successful management of personal finances 

  • When buying an item, the first thing I think about is whether I can afford it

Think about it, on a scale of 1-5, do you make rational decisions that are in line with your own financial possibilities? Is your financial situation entirely within your control?

Chen's research provides a tool for measuring the level of a consumer's responsibility as they make consumption-related financial decisions. 

James Ming Chen holds the Justin Smith Morrill Chair in Law at Michigan State University. He is a visiting scholar at the Faculty of Economics and Business at the University of Zagreb in Croatia. 

Barbić, D., Lučić, A., & Chen, J. M. (2019). Measuring responsible financial consumption behaviour. International Journal of Consumer Studies, 43(1), 102-112. Retrieved from https://rdcu.be/buxc4

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