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Date of Award
Peter A. Lichtenberg
Financial decision-making is important for older adults, and many are at increased risk for elder financial exploitation due to a combination of biological, social, and psychological factors. The role of self-efficacy for financial decision-making in this population has received little attention from researchers, but evidence suggests it may be a critical aspect in motivating positive decisions and avoiding exploitation. This study developed the Financial Decision-Making Self-Efficacy Scale (FDMSES) for older adults. Participants (N = 200, mean age = 71.5) completed the Lichtenberg Financial Decision-Making Rating Scale (LFDRS) and a neuropsychological test battery. Items from the LFDRS related to financial decision-making confidence and mood were selected a priori based on a literature review. Factor analyses produced a four-item unidimensional scale, accounting for 42.2% of the variance with factor loadings ranging from .54 to .87 and adequate internal consistency (Cronbach’s α = .73). Higher FDMSES scores were associated with better performance on tests of executive functioning, even after accounting for age and education (Δ R2 ranged from .02 to .04), but were not associated with financial skills and knowledge. Mean FDMSES scores were lower among people with impaired financial decisional ability (t = 2.95, p < .01) and people with a history of elder financial exploitation (t = 4.97, p < .001). These findings highlight the importance of self-efficacy for making real-life financial decisions and avoiding financial exploitation regardless of basic financial abilities. The FDMSES is a brief, psychometrically sound measure for use with older adults and holds promise as a screener to detect psychological vulnerability to financial exploitation, an outcome measure for financial literacy interventions, and an addition to financial surveys.
Gross, Evan, "Development Of A Financial Decision-Making Self-Efficacy Measure For Older Adults" (2016). Wayne State University Theses. 524.