People with high BMI or diabetes save less, according to research by Sarah Brown, Daniel Gray, Jennifer Roberts and colleagues, to be presented at the Royal Economic Society's annual conference at the University of Bristol in April 2017.
The authors analyse a sample of around 3,000 individuals from Understanding Society, a nationally representative UK survey. They discover that a range of biomarkers have a significant impact on saving behaviours. For example, a 1% increase in BMI causes a 0.2% decrease in the monthly amount saved, while a 1% increase in waist circumference reduces saving by 0.25%, and a 1% increase in triglycerides, a blood marker for diabetes, reduces monthly saving by 0.17%.
The authors comment: ‘Given the consensus that people are not saving enough, it is essential to deepen our understanding of what drives saving behaviour. Our results suggests that there are underlying mechanisms between poor health and wider household decision-making, including financial decisions.’
Biomarkers influence individual saving behaviours
Our findings indicate that poor health as measured by a range of biomarkers, such as triglyceride levels (an indicator of blood fat) and, glycated haemoglobin (an indicator of diabetes), have a significant impact on a range of saving behaviours.
These findings are from research conducted by Sarah Brown, Daniel Gray and Jennifer Roberts, who are based at the University of Sheffield and Pulak Ghosh and Bhuvanesh Pareek who are based at the Indian Institute of Management of Bangalore and Indore.
Drawing on data from a nationally representative survey of the UK, the authors aim to ascertain the impact a range of health measures have on a variety of saving behaviours. These saving behaviours include monthly saving, retirement savings and the level of financial assets.
Using a range of biomarkers, in addition to alternative, more traditionally used self-assessed health measures, the relationship between health and saving is assessed. Biomarkers are objective measures of health status based on a range of outcomes collected by a nurse and include information included from both blood and urine samples.
Given the consensus among policy-makers that individuals are not saving enough, it is important to further our understanding of the determinants of saving behaviour. Furthermore, since the financial crisis, which highlighted the financial vulnerability of many households, understanding the determinants of a household’s financial position has been of increased importance. Consequently, the authors explore the relationship between saving and health.
Using a flexible statistical model, which allows the separation of the decision to participate in saving behaviour and the level of participation, the authors analyse a sample of approximately 3,000 individuals from Understanding Society, a nationally representative UK survey.
The results show that a range of biomarkers, including BMI, waist circumference and blood markers for triglycerides and diabetes have a significant impact on saving behaviours. Specifically, the results indicate that worse health – that is higher weight, waist circumference and markers of triglycerides and diabetes – are associated with lower levels of monthly saving.
For example, a 1% increase in BMI causes a 0.2% decrease in the monthly amount saved, while a 1% increase in waist circumference reduces saving by 0.25%. Similarly, a 1% increase in triglycerides or HbA1c, a blood marker for diabetes, reduces monthly saving by 0.17% and 0.14%, respectively.
The fact that these health measures, which are potentially unobserved by an individual, influence saving behaviours is interesting from a research perspective and potentially suggests that there are underlying mechanisms between poor health and wider household decision-making, including financial decisions, which warrant further research.
Dr Daniel Gray