Abstract

This study investigates the impact of traumatic experiences on the financial behavior of college students, with a primary focus on impulsive spending habits. It draws from the junction of existing literature with behavioral economics and consumer psychology to analyze whether exposure to trauma increases impulsive spending among college students. For this, it uses 2 empirical studies of survey data collected from College of Wooster students, comparing changes in impulsive spending behavior between students who experienced trauma and those who did not. The theoretical framework is based on the consumer theory, containing the Cobb-Douglas utility function to explain how trauma may shift students’ financial preferences between saving and impulsive consumption. The empirical strategy combines this theoretical foundation with robust regression models to study the trauma-finance relationship. Findings reveal that there is a statistically significant relationship between traumatic events and increased impulsive spending, with the effect being greater among certain demographic groups. The study contributes to the growing body of literature on behavioral responses to trauma by highlighting the importance of mental health in financial decision-making among young adults. It emphasizes the need for targeted financial counseling and mental health interventions on college campuses to mitigate the adverse financial outcomes associated with trauma.

Advisor

Davison, Colin

Department

Economics

Disciplines

Behavioral Economics

Keywords

impulsive spending, Traumatic events

Publication Date

2025

Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis

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