Sálfræðileg forspá um skuldir (Psychological predictors of debt)

The aim of the proposed research programme is to investigate underlying psychological factors that lead consumers to over-spend and, consequently, to personal over-indebtedness. To date, psychologists have mostly focused on social-economic status, education, income and financial skills as predictors of over-indebtedness. This research programme, however, aims to discover the psychological process that is at the root of the race for material possessions, luxury and the associated "good life" so dominant in Icelandic society. This is a new contribution to the research field. A model of associations is proposed which predicts individual debt from self-discrepancies, materialism and buying-motives. Money-management skills are hypothesised to moderate this relationship. Further, compulsive shopping and Subjective Well-Being are assessed, given that they are correlates of individual debt. Another novel contribution of the proposed research is that it opens up an entirely new field of research in the history of psychology in Iceland. Finances and economic life have, to date, not been on the agenda of Icelandic psychological research. Implications of the research are timely and important. Theoretical implications are increased understanding of consumption and debt levels of Icelanders. Applied implications include education and intervention for indebted households. Household debt has been rising steadily in the past decade and has now reached such worrying proportions that government and policymakers have called for action.