Household behavior in practicing mental budgeting based on the theory of planned behavior

Ume Habibah,Naintara Naintara,Ibne Hassan,Muhammad Shahid Iqbal

doi:10.1186/s40854-018-0108-y

Ume Habibah, Naintara Naintara + Show 2 more

Open Access

https://doi.org/10.1186/s40854-018-0108-y

Copy DOI

Abstract

Ajzen’s theory of planned behavior (TPB) suggests that planned behavior is determined by behavioral intention. Despite extensive literature based on TPB, household mental budgeting behavior explained by TPB is underexplored. The current study empirically tested TPB factors in light of mental budgeting behavior. The hypothesized model was tested using partial least squares structural equation modeling (PLS-SEM). PLS-SEM was employed using a Likert-scaled questionnaire administered to 275 households. The results indicate that mental budgeting attitude and mental budgeting past behavior strongly predict mental budgeting intention, and mental budgeting intention predicts mental budgeting behavior. Further, mental budgeting intention partially mediates the relationship between mental budgeting attitude and mental budgeting behavior, and mental budgeting past behavior and mental budgeting behavior. This study contributes to the academic interest in theoretical progress in household behavior.

Highlights

Ajzen’s theory of planned behavior (TPB) suggests that planned behavior is determined by behavioral intention
This study extends the literature on TPB by empirically testing whether a modified TPB can explain mental budgeting behavior
The descriptive statistics shown in Additional file 1 indicate that mental budgeting attitude and mental budgeting past behavior were stronger among respondents compared to their mental budgeting intention and behavior

Summary

Introduction

Ajzen’s theory of planned behavior (TPB) suggests that planned behavior is determined by behavioral intention. Heath and Soll (1996) approached mental accounting in the dimension of budgeting and provided a theory of mental budgeting. Mental budgeting is important for households for a couple reasons It affects consumer decisions (Heath and Soll, 1996) such that a consumer may underconsume in a specific category if he or she made an unplanned purchase that is highly typical of that category. Prior literature has shown how mental budgeting is related to household finances, but a question remains about which factors predict mental budgeting behavior. This study, aimed to explain the household behavior of managing finances while practicing mental budgeting based on the theory of planned behavior (TPB). This study extends the literature on TPB by empirically testing whether a modified TPB can explain mental budgeting behavior. The final section concludes the paper with some recommendations and future research directions

Objectives

Results

Discussion

Conclusion