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Study Reveals That Brazilians Have a Tendency to Seek Short-Term Financial Results
12/11/2017 - 11h28
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ANA ESTELA DE SOUSA PINTO
FROM SÃO PAULO
A survey conducted by the Datafolha Institute, that used unprecedented statistics, revealed that Brazilians have a tendency to seek immediate financial results and have a very low propensity to save money.
The statistics measure the disproportionate importance attributed to the present, a short-term mindset which economists refer to as the "present bias".
The survey revealed that 65% of Brazilians do not save money - even among the wealthiest the rate is high: approximately half don't have backup funds.
According to Ricardo Brito, a professor at the Insper School who specializes in finance and savings decisions, one possible explanation is that there is a lack of incentives to save up money given that, in most cases, retirement pensions and Time of Service Guarantee Funds (FGTS) are either equivalent or superior to income.
The main issue is that the pension reform bill would reduce and delay access to benefits, thus making the need to voluntarily and privately save money even more important. The survey suggests that Brazilians are not ready to take that step, whether due to a lack of knowledge or to a strong present bias.
The "patience" rate of Brazilians is 0.26, a rate that, according to Mr. Brito, reveals an "exacerbated present bias". Mr. Brito coordinated the survey based on data from the Datafolha Institute.
The number was arrived at based solely on answers that made sense from a logical and financial standpoint - 70% of the 6,000 people interviewed over the course of two rounds did not have enough of a financial background to answer the questions.
Back in 2011, researchers from Germany and Switzerland compared the present bias of 45 different countries. The country with the lowest patience rate was Russia: 0.21. Brazil's rate of 0.26 is lower than half the average rate in Latin America.
Translated by THOMAS MATHEWSON