The Moderation Effect on Mortality Saliance Toward Individual Characteristic on Financial Decision Making, From the Perspective of Terror Management Theory

Abstract

The purpose of this study is to investigate the relationship between individual personality traits such as locus control and materialism in financial decision making under mortality salience conditions. Mortality saliance is the condition in which an individual realizes that life is full of vulnarability. The study was conducted by Quasi Experiment and data anaylized by using Analysis Univariate (ANOVA) for a total of 329 samples. Experiment procedure involved in three steps, first begin to assess the level of materialism, risk attitude and locus control of each participant, (2) divided the participant to High and Low group and Control group, (3). Done the manipulation check, (4). Tested their preference by choices of the financial product. The participants were females working in government and private banks and microfinance institutions. Participants are divided into two groups, 2X2 and categorized by the level of mortality salience conditions, risk attitude and materialism. The result found that participants in high saliance mortality conditions in internal locus control and high materialism levels preferably invest in long-term financial products that give a high return compared to group participants with low levels of external locus control and in low mortality saliance conditions and low level of materialism. It is explained that individuals in high mortality saliance become more materialistic and more likely to invest in long-term financial products. Internal locus control means an individual is confident within themselves to take probability loss over big return. Mortality salience is positively correlated with strengthening the level of materialism and individual risk-taking behavior within a participant as wealth produces happiness and confidence that relieves the feeling of vulnerability in life.