The financial awareness of the consumer
The government is not a lucky machine.’ This statement of our prime minister represents the times in which we live. After years of economic prosperity, there is now less luck to go around, and after decades of collective regulations, the government is less capable and less inclined to provide citizens with the good fortune that they seek. The Dutch government is withdrawing more and more. From the health care sector, the pensions, from the labor market, and certainly from the housing- and mortgage market. Dutch citizens must become more capable of managing their own financial planning. More and more major decisions must be made independently, such as saving for one's old age or the financing of one's home.
In this chapter, Dirk Brounen (TIAS School for Business & Society) examines the question of the extent to which Dutch society is ready for this transition. Are our households already working on their financial planning and are they capable of finding their way in the mortgage market? And perhaps even more important, is this the right course to take and how can we stimulate the skill of making adequate financial choices – financial awareness? In this chapter, he discusses the research results of two studies in which he worked together with two co-researchers. The results on the subject of choice of mortgage stem from the work Financial Literacy, Risk Aversion and Choice of Mortgage Type by Households that came about together with Dr. Ruben Cox and Dr. Peter Neuteboom, colleagues at the RSM Erasmus University. Results regarding saving behavior are derived from the study Financial Responsibility, Attitude and Financial Decision Making. This study is a co-production with Prof. Dr. Kees Koedijk and Dr. Rachel Pownall, colleagues at TIAS.
This chapter makes up part of the Congress volume “Perspectives for Real Estate financing” of the Bachiene Foundation. The chapter by Dirk Brounen is provided as recommended reading below.
Perspectieven voor vastgoedfinanciering, Brounen (2014) - in Dutch