Progress 10/01/12 to 09/30/17

Outputs
Target Audience:This research has been disseminated among researchers and practitioners in the family andconsumer science community through the ACCI and AFCPE conference presentations. Moreover, research findings have been transmitted to domestic and international audiences through multiple publications in top field journals. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?Minhong Xu, a fifth-year Ph.D. student in the Department of ACE at the University of Illinois, was hired during the reporting period to support my research projects. While she was assisting in the data analysis, literature review, and manuscript preparation, she was trained to be an independent researcher. How have the results been disseminated to communities of interest?I published research papers in peer-reviewed journals and gave presentations at prestigious conferences such as ACCI, AFCPE, AAFCS, and AREUEA. My papers have been downloaded and reviewed frequently, and my two award-winning survey papers attracted the most attention. The one investigating the considerations for young adults' homeownership decision was #1 in Top 10 Most Downloaded FCSRJ Articles during 2016 (1,116 downloads), and a paper investigating student loan decisions was #1 and #3 in Top 10 Most Downloaded FCSRJ Articles during 2015 and 2016 (1,782 downloads/ 822 downloads respectively). I share my working papers on the Social Science Research Network (SSRN), so that the research results can be accessible by academia and the general public before publication. I take advantage of the internet as an outlet to reach out to more people in need. The reputation of the University of Illinois and its Extension mission allow me to reach out to audiences beyond our local community. What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

Impacts
What was accomplished under these goals? The first phase of thisproject focuses on household financial decision making, starting with a focus on housing and credit decisions and later onstudent loan and retirement decisions. In a single-authored paper published in Urban Studies (Xu 2017), weshowed that a savings and loan program that incorporates behavioral economics theories has successfully stimulated homeownership. The empirical evidence from a natural experiment in China suggests that automatic enrollment, tax-exempt savings, matching contributions, mental accounting, and self-discipline can help incentivize savings and promote homeownership. Our research suggests the importance of applying behavioral economics theories in policy designs. With my coauthors (Xu, Johnson, Bartholomae, O'Neill, & Gutter, 2015), I reviewed external and internal factors influencing homeownership decisions for millennials, that is, those who were born between the 1980's and the early 2000's. The review of the literature suggests that credit accessibility is an important external factor for millennials' homeownership. Also important are lifecycle factors such as financial resources and student loans liabilities, and family decisions such as marriage and parenthood. In a paper forthcoming in Real Estate Economics (Xu and Xu 2017), my student co-author and I investigate mortgage credit access in the presence of environmental hazard arising from the growing energy sector. We show that lenders lowered origination rates in areas subject to pipeline infrastructure risks and especially after an incident happened. The lenders were more likely to deny low- to middle-income borrowers and securitize the loans for high-income borrowers, yet their ability to transfer the risk to the security market was tampered by the Great Recession. My work along this line of research has been successfully published in peer-reviewed journals such as Urban Studies, Regional Science and Urban Economics, Real Estate Economics, Family and Consumer Sciences Research Journal, Journal of Family and Economic Issues, and the Journal of Human Sciences and Extension. Two pieces of my work havewon the best paper awards of the Family and Consumer Sciences Research Journal, in the areas of housing and consumer economics.The quality of my research has been recognized by my leadership role fora multi-state multi-institute research group (NC-2172) where I served as vice-chair from 2015 to 2018 and as chair starting in2018. The second phase of my project integrates methods and theories from economics and psychology to understand individual differences in financial decision-making. In my initial work published in Journal of Economic Psychology (Xu et al. 2015), I found that the Big Five personality traits significantly predict young adults' financial distress, even after controlling for early life experiences, household income, and other demographic characteristics. In a household context, both the absolute value and relative strength of a couple predict the allocation of financial decision power (Xu and Yao, 2017 under review), which is evidence for the comparative advantage theory of household power allocation. Inefficient power allocation is associated with lower household wealth. My research highlights the importance of personality traits as a non-cognitive factor in determining financial behaviors. In a paper published in the Journal of Economic Behavior and Organization (Xu et al. 2017), my co-authors and I find that financial distress is highly genetic and personality traits mediate such genetic influences. Moreover, we find evidence that environment and genes interact with each other to form individual financial behaviors. In particular, such genetic influences are the strongest among young adults whose parents are at the extremes of socioeconomic status.

Publications

• Type: Journal Articles Status: Under Review Year Published: 2017 Citation: Xu, Y. 2017. Foreclosed American Dream: Does Parental Foreclosure Affect Young Adults' Housing Decision? (Under Review).
• Type: Journal Articles Status: Under Review Year Published: 2017 Citation: Xu, Y. and Yao, R. 2017. Financial Decision Power and Household Wealth: The Role of Personality and Cognitive Ability. (Under Review).
• Type: Journal Articles Status: Under Review Year Published: 2017 Citation: O'Neill, B., Xu, Y., Johnson, C.L., Kiss, D.E. and Buyske, S. 2017. As Soon As& Finances: A Mixed Methods Study of Financial Decision-Making. (Under Review).
• Type: Journal Articles Status: Awaiting Publication Year Published: 2017 Citation: Xu, M. and Xu, Y. 2017. Environmental Hazards and Mortgage Credit Risk: Evidence from Texas Pipeline Incidents. Real Estate Economics. doi:10.1111/1540-6229.12213.
• Type: Journal Articles Status: Published Year Published: 2016 Citation: Johnson, C.L., Gutter, M., Xu, Y., Cho, S.H. and DeVaney, S. 2016. Perceived Value of College as an Investment in Human and Social Capital: Views of Generations X and Y. Family Consumer Science Research Journal, 45: 193207. doi:10.1111/fcsr.12195.
• Type: Journal Articles Status: Published Year Published: 2017 Citation: Xu, Y. 2017. Mandatory Saving, Credit Access and Homeownership: The Case of the Housing Provident Fund. Urban Studies, 54(15) 34463463. doi.org/10.1177/0042098016676158.
• Type: Journal Articles Status: Published Year Published: 2017 Citation: Xu, Y., Briley, D.A., Brown, J.R. and Roberts, B.W. 2017. The Environmental and Genetic Influences on Household Finance. Journal of Economic Behavior and Organization. 142 (404-424). https://doi.org/10.1016/j.jebo.2017.08.001.
• Type: Journal Articles Status: Awaiting Publication Year Published: 2017 Citation: ONeill, B., Xu, Y., Johnson, C. and Kiss, D.E. 2018. Twitter Chat as A Research Tool: A Study on the Financial Decisions of Young Adults. Journal of Human Sciences and Extension. Forthcoming.
• Type: Journal Articles Status: Awaiting Publication Year Published: 2017 Citation: Xu, Y. and Fan, L. 2017. Adolescent Friendship Networks and Heterogeneous Peer Effects on Misbehaviors. Education Economics. Forthcoming.

Progress 10/01/15 to 09/30/16

Outputs
Target Audience:During this reporting period, my research has been disseminated among both researchers and practitioners in the family and consumer science community through the ACCI and AAFCS conference presentations. Moreover, my research findings have been transmitted to the general public both domestic and international through multiple media and the FCSRJ award announcements (See the Accomplishments Section). Finally, my research findings on personality and young adult financial distress have been introduced to high school students at Pacific Hills School in California in a two-day lesson and class discussions lead by Mr. Michael J. Wagner, the Co-Executive Director of the Pacific Hills School. Changes/Problems:This project was extended to 09/30/2017. What opportunities for training and professional development has the project provided?Minhong Xu, a fourth-year Ph.D. student in the Department of Agricultural and Consumer Economicsat the University of Illinois, was hired during the reporting period to support my research projects. While she was assisting the data analysis, literature review, and manuscript preparation, she was trained to be an independent researcher. She has presented at multiple national conferences and workshops. She was the finalist of the 2015 student paper competition of the North American Regional Science Council (NARSC). Xu, M. (presenter), Xu, Y. and Khanna, M. The Effects of the Natural Gas Boom on Water Use.AERE Summer Conference, Breckenridge, CO, June 2016. Xu, M. (presenter), Xu, Y. and Khanna, M. The Effects of the Natural Gas Boom on Water Use. 2016 AAEA Annual Meeting, Boston, MA, July 2016. Xu, M. (presenter) and Xu, Y. Environmental Hazards and Mortgage Credit Risk: Evidence from Texas Pipeline Incidents. IPAD workshop at the Department of ACE, University of Illinois, September 2016. Xu, M. (presenter) and Xu, Y. Environmental Hazards and Mortgage Credit Risk: Evidence from Texas Pipeline Incidents. 63rd Annual North American Meetings of the Regional Science Association International, Minneapolis, MN, November 2016 (Scheduled). How have the results been disseminated to communities of interest?I have devoted myself to disseminating and communicating my research findings to both domestic and international audiences as well as those inside and outside of the field of family and consumer science and household finance. My research has been presented to a broad audience including researchers and practitioners at the ACCI and AAFCS conferences. In particular, videos of presentations on my award-winning papers have been posted on the internet, allowing all-time access from all around the world (http://www.aafcs.org/ResearchCenter/2015_FCSRJ_Awards.asp?goal=0_ada2958cc9-3a6886c291-87293225). The award announcements on the AAFCS website also attracted attention to my research findings (http://www.aafcs.org/ResearchCenter/FCSRJ/Best_Paper_Awards/2015_FCSRJ_Best_Papers.pdf). The two award-winning papers receivedhundreds of reads on Research Gate: Cho et al. (2015) reached 436 reads and Xu et al. (2015) reached 106 reads, and both were cited multiple timeswithin one year. I also disseminated my research findings through the public media to reach the general public. My award-winning research about millennial housing decisions was featured in Inside Illinois and several other major media in the United States including the Huffington Post, as well as international media such as the CBC News online in Canada, Latest Nigerian News in Nigeria, and Money Life in India. My research on how a young adult's personality affects their financial distress was introduced in the Squared Away Blog by the Center for Retirement Research at Boston College. What do you plan to do during the next reporting period to accomplish the goals?My Hatch grant has been extended for another year to expand my research portfolio to include interdisciplinary research that combines theory and methodologies from psychology, economics, and finance to examine the complex interactions between genes and environments that affect financial decisions and life outcomes. In particular, the underlying mechanisms of social immobility, i.e., the strong and well-known persistence of wealth, income, education, and occupation across generations and over one's lifetime, remain a puzzle in the economics and sociology literature. Using twins and siblings from the National Longitudinal Survey of Adolescent Health (Add Health), I propose to explore the roles of genetics, environment, and their interactions in explaining social mobility. I expect to have submitted at least another manuscript out of this research by the end of the extended funding period. Meanwhile, I will be following through the publication process for my work currently under review.

Impacts
What was accomplished under these goals? The first phase of my project focuses on the housing and credit decisions of households and individuals. This line of research continued into this reporting period. I have been recognized for my research on millennials' delayed homeownership in that the 2015 paper written by Xu, Johnson, Bartholomae, and Gutterhas won the Best Paper in Housing Economics at the Family and Consumer Research Journal. I also published a single-authored paper at Urban Studies, a top journal in the field of urban studies. The empirical evidence from a natural experiment in China suggests that automatic enrollment, tax-exempt savings, matching contributions, mental accounting, and self-discipline all play a role in incentivizing savings and promoting homeownership. My research suggested that the importance of applying behavioral economics theories in policy designs. In another single-authored paper, I found that the psychological trauma of witnessing a parental foreclosure lowered young adult children's homeownership rate. The research revealed a reinforcement effect of housing demand spinning down through a younger generation's avoidance of homeownership. It also added a unique perspective on intergenerational transmission of housing wealth. Regarding mortgage credit access, weexamined how pipeline incidents have affected lenders' risk perceptions and risk management strategies. We showed that an average loan in the pipeline-present areas is 1.6% less likely to be originated. Whenever new incidents happen, lenders further decrease the origination likelihood by 1.8%. Moreover, the effect emerges mainly on low- to middle-income borrowers, suggesting that advancing pipeline hazards mitigation policy could improve the credit availability to lower-income borrowers. In another paper that studied the alternative credit of payday loans, I show that the payday loan regulation of Illinois decreased theft and motor theft in the Chicago neighborhoods where payday loans used to be prevalent, but there were no measurable declines in burglary, robbery, drug-related crimes, or violent crimes. The empirical evidence suggested the lending restrictions that protected consumers from repeated borrowing and aggressive debt collection successfully prevented financial damages that could motivate crimes in extreme cases. Since last year, I expanded our early work to incorporate a behavioral genetics approach to partition the genetic and environmental components in financial behaviors and personality traits respectively. I integrated methods and theories in economics with those in psychology to study factors that determine the individual differences in financial behaviors. Using biologically informative sibling data from the Add Health, we showed that financial distress is considerably genetically influenced. The genetic behavior approach applied in my research bridged the behavioral genetics approach used in psychology with economic analysis of human behaviors, and hence open a new horizon for research in psychology, economics, and health. I also made considerable progress in understanding the financial decision-making of young adults. My paper on student loan decisionswon the Best Paper in Personal Finance/Consumer Economics at the Family and Consumer Research Journal. We also compared the Millennials' perceived value of college education toGeneration X, and we found that Millennials value the social capital investment more than the Gen X.In examining how social network affects decision-making, Ifound that adolescents were disproportionally more likely to make friends who have the same immigration status and ethnicity and that the peer effects on misbehaviors are stronger from the similar friends than from dissimilar friends. Finally, we used Twitter chat as an innovative research tool to conduct a survey about young adults' financial decision-making. We showed that Twitter chats provide a synchronous environment for participants to answer a structured series of questions and to respond to both the chat facilitator and each other. Award Papers From Last Year's Publications Cho, S., Xu, Y. and Kiss, D.E. 2015. Understanding Student Loan Decisions: A Literature Review. Family & Consumer Sciences Research Journal, 20(2), 305-322. Xu, Y., Johnson, C., Bartholomae, S., O'Neil, B. and Gutter, M. 2015. Homeownership Among Millennials: The Deferred American Dream? Family & Consumer Sciences Research Journal, 44(2), 201-212.

Publications

• Type: Journal Articles Status: Accepted Year Published: 2016 Citation: Xu, Y. 2016. Mandatory Saving, Credit Access and Homeownership: The Case of the Housing Provident Fund. Urban Studies.
• Type: Journal Articles Status: Accepted Year Published: 2016 Citation: Johnson, C., Gutter, M., Xu, Y., Cho, S. and Devaney, S. 2016. Perceived Value of College as an Investment in Human and Social Capital: Views of Generations X and Y.
• Type: Journal Articles Status: Under Review Year Published: 2016 Citation: Xu, M.,and Xu, Y. 2016. Environmental Hazards and Mortgage Credit Risk: Evidence from Texas Pipeline Incidents. Journal of Urban Economics.
• Type: Journal Articles Status: Under Review Year Published: 2016 Citation: Xu, Y. 2016. Foreclosed American Dream: Does Parental Foreclosure Affect Young Adults' Housing Decision?
• Type: Journal Articles Status: Under Review Year Published: 2016 Citation: ONeill, B., Xu, Y., Johnson, C. and Kiss, D.E. 2016. Financial Decisions of Young Adults: Results from a Twitter Chat. Journal of Human Sciences and Extension.
• Type: Journal Articles Status: Under Review Year Published: 2016 Citation: Xu, Y. 2016. Payday Lending and Crimes in the Neighborhood. Urban Affair Review.
• Type: Journal Articles Status: Under Review Year Published: 2016 Citation: Xu, Y. 2016. Adolescent Friendship Networks and Heterogeneous Peer Effects on Misbehaviors. Education Economics.
• Type: Journal Articles Status: Other Year Published: 2016 Citation: Xu, Y., Briley, D.A., Brown, J.R. and Roberts, B.W. 2016. The Environmental and Genetic Influences on Household Finance. To be submitted in November to Journal of Financial Economics.

Progress 10/01/14 to 09/30/15

Outputs
Target Audience:I have devoted myself to disseminating and communicating my research findings to bothdomestic andinternational audiences as well as those inside and outside of the field of consumer economics and household finance. The target audience included international and domestic scholars in economics, financial planning, psychology,law,and demographics, as well asfinancial educators, students, and financial planningpractitioners. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?Shanshan Wang, a fourth-year Ph.D. student, and Minhong Xu, a third-year Ph.D. student, both inthe Department of ACE at the University of Illinois, were hired in the reporting period to support my research projects. While they were assisting the data analysis, literature review, and manuscript preparation, they were also being trained to be independent researchers. Both of them have started their Ph.D. thesis research and have presented at national conferences in their fields. How have the results been disseminated to communities of interest?I have devoted myself to disseminating and communicating my research findings to bothdomestic andinternational audiences as well as those inside and outside of the field of consumer economics and household finance. My research has been presented tointernational audiences at the Asian Consumer and Family Economics Association (ACFEA) 10th Biennial Conference in Taiwan and atthe International Conference of the Association for Public Policy Analysis and Management in Spain. My research has been communicated to law scholars and demographics scholars at the Conference on Empirical Legal Studies held in Berkley Law School and at the Annual Meeting of the Population Association of America held in San Diego. Financial planning scholars, educators, and practitioners representanother important targeted group. My research on millennial housing decisions was presented at the Association for Financial Counseling and Planning Education (AFCPE) Symposium. I have also taken advantage of opportunities onlineto reach out to more people in need. The reputation of the University of Illinois and its Extension mission allow me to reach out to audiences beyond our local community. My research about financial behavior was featured on the Collegewebsite, raising awareness of financial security. I blogged on the ACE Policy Matters website about Consumer Financial Protection, an area in which I have been extensively researching and teaching. Also, I was invited to give financial management advice on Wallethub.com, a website that provides tools and information for consumers and small business owners to make better financial decisions. As part of the Multistate Research Group NC-2172I have had opportunities todisseminate my research findings to a broader audience through this network of financial education and Extension experts. What do you plan to do during the next reporting period to accomplish the goals?My Hatch grant has been extended for one year to expand my research portfolio to include interdisciplinary research that combines theory and methodologies from psychology, economics and finance to examine the complex interactions between personality traits and lifelong financial security. I expect to have submitted at least one manuscript out of this research by the end of the extended funding period. Meanwhile, I will be wrapping up the research on millennials' college decisions and will continue tosubmit and revise articles for peer-reviewed journal publications.

Impacts
What was accomplished under these goals? During this reporting period, I have made considerable progress in understanding the household finance decisions for both the ChineseandUS populations. The findings not only provided insight into the long-term financial security of households but also have important implications for designing effective financial education and financial intervention programs. To address the challenges faced by households in saving for housing, I evaluated a Housing Provident Fund in China, which consisted ofa voluntary or mandatory savings account and eligibility for discounted mortgage loans. My findings suggest that mandatory savings accounts earmarked for housing complemented by discounted loan opportunities could incentivize saving for housing and resolve the wealth, income, and credit constraints on homeownership. The findings of this study suggest the importance of designing government housing and mortgage programs that incorporate behavioral economics theories. There have been increasing applications of behavioral economics theories in policy designs regarding saving for retirement and education. More application along this line can be explored to promote homeownership. In another paper we examined the security investment decisions of Chinese households, and we found that Chinese households who had investment knowledge and a long-term financial plan were more likely to participate in the securities markets. My research on the US population focuses on the young population. Young adulthood sets the stage for financial security in later life; as such, this study provides insight for lifelong financial well-being. My research examines young adults' major financial decisions such as student loans and homeownership as well as basic financial management behaviors. We reviewedstudent loan decisions regarding human capital investment and intergenerational wealth transfer, and its impact on college enrollment, career decisions, and other personal life decisions. We examined both external and internal factors that affect homeownership for millennials. We found that mortgage accessibility is a key constraint to homeownership for millennials. High student loan debt among millennials impedes their transition from renters to homeowners. Family events, such as marriage, divorce, and childbearing, are very much related to home purchase. I have started a project that studies the generational difference in the perceived value of a college education and the difference in funding sources for college education. I also examined how payday loan restrictions have affected crime in neighborhoods where payday loans used to be prevalent. The empirical evidence suggests that theft and motor theft declined in Chicago as the state implemented the Illinois Payday Loan Reform Act, which restricted the loan amount, fees, terms, concurrent loans, and stipulated other measures to prevent repeated borrowing. The findings suggest that the lending restrictions prevented financial damages that could motivate crimes in extreme cases. A better understanding of what leads to poor financial outcomes can suggest alternative interventions to promote financial well-being in the next generation. I have developed a line of work that studies personality and financial behaviors. In our initial work, we established the cross-sectional correlations between personality traits and financial behaviors. These correlations are robust to controlling for early life background and other demographic and socioeconomic factors. The findings suggest that personality traits are human capital factors that are independent of other background factors that contribute to young adults' financial outcomes. I expanded our early work to incorporate a behavioral genetics approach to partition the genetic and environmental components in financial behaviors and personality traits respectively. I am now working with my collaborators on exploring how personality traits affect financial behaviors through a genetic pathway. Findings from thisstudy will shed light on the mechanism of individual differences in financial behaviors. Based on the empirical results, we can inform stakeholders how to design effective behavioral and policy interventions that can be used to improve financial well-being.

Publications

• Type: Journal Articles Status: Published Year Published: 2015 Citation: Cho, S., Xu, Y. and Kiss, D.E. 2015. Understanding Student Loan Decisions: A Literature Review. Family & Consumer Sciences Research Journal, 20(2), 305-322.
• Type: Journal Articles Status: Published Year Published: 2015 Citation: Xu, Y., Beller, A.H, Roberts, B.W. and Brown, J.R. 2015. Personality and Young Adult Financial Distress. Journal of Economic Psychology, 51, 90-100.
• Type: Journal Articles Status: Published Year Published: 2015 Citation: Xu, Y., Johnson, C., Bartholomae, S., ONeil, B. and Gutter, M. 2015. Homeownership Among Millennials: The Deferred American Dream? Family and Consumer Sciences Research Journal. Volume 44, Issue 2, pages 201212, December 2015.
• Type: Journal Articles Status: Published Year Published: 2015 Citation: Yao, R. and Xu, Y. 2015. Chinese Urban Households Security Market Participation: Does Investment Knowledge and Having a Long-Term Plan Help? Journal of Family and Economic Issues, 36(3), 328-339.

Progress 10/01/13 to 09/30/14

Outputs
Target Audience: This project studies the financial behaviors of Chinese and U.S. households, with special attention to use ofcredit and financial management. The goal of the project is to identify the driving force behind individual and household financial behavior. As such, the research results of the project will be of interest to a wide audienceship, including researchers in consumer economics, household finance, and behavioral finance, as well as policymakers. Changes/Problems: Because additional funds were made available, work under this project was expanded to include interdisciplinaryresearch thatcombines theory and methodologies from psychology, economics and finance to examine the complex interactions between personality traits and lifelong financial security.The first step will use the twin data from the National Longitudinal Study of Adolescent Health to examine the extent to which the correlation between personality traits and financial behaviors are heritable. We will apply tools of genetic analysis to financial behaviors, which we anticipate will advance our understanding of why there is so much (currently unexplained) heterogeneity in financial outcomes. These insights are important for designing policy and behavioral interventions to improve savings and other financial outcomes. What opportunities for training and professional development has the project provided? Ms. Shanshan Wang was hired in fall 2013 and summer 2014as a research assistant on the project "Personality Traits and Financial Outcomes". This project provides great opportunities for her to learn useful data analysis skills. How have the results been disseminated to communities of interest? I have presented the paper "Personality, Early Life Condition, and Young Adult Financial Behaviors and Outcomes" at the American Economic Association Annual Meetings, the American Council for ConsumerInterests Annual Conference, and the Add Health Users Conference. I also presented the paper "Payday Loan Regulation and Crime in the Neighborhood" at the Eastern Economic Association Annual Conference, the Urban Affairs Association 42nd Conference, the International AREUEA Conference, and the Conference on Empirical Legal Studies. What do you plan to do during the next reporting period to accomplish the goals? Because additional funds were made available, work under this project was expanded to include aninterdisciplinaryresearch thatcombines theory and methodologies from psychology, economics and finance to examine the complex interactions between personality traits and lifelong financial security. Seethe"Changes/Problem"section for details.

Impacts
What was accomplished under these goals? During thisreporting period, I finished amajor project thatcompares household finance between U.S. households and Chinese households,with special attention to theimpact of mandatory saving for housing.Unlike credit expansion through the banking sector in Western economies, many Asian economies promote homeownership through savings and loan programs called housing provident funds (HPFs). In my paper entitled "Mandatory Savings, Credit Access and Homeownership: The Case of the Housing Provident Fund" (under review), I examine whether and how HPFs affects homeownership in China. I found that since discounted loans became available in 1998, households with double enrollments in the program increased their homeownership by 38 percentage points, and those with single enrollment increased by 14 percentage points.The findings suggest that HPF programs could be an effective policy tool for national governments to promote housing consumption. I compared and contrasted the homeownership promotion policies in China and the United States andfound that the HPF in China, a self-sufficient savings and loan program, provides strong incentives to save for housing by mandating monthly pre-tax payroll deductions and matching employer contributions. In addition, it provides favorable financing options with low interest rates and down payment requirements. The credit risk for HPF loans is relatively low given that HPF loans are employment-based and depend on previous deposits made by borrowers. All these features make the HPF an appealing alternative to mortgage credit expansions through lax lending standards as used in the U.S. in the period leading to the Great Recession. Household financial behaviors may have unexpected side effects onsociety. For instance, inappropriate use of credit may lead to financial distress that motivates crime behaviors. I conducted a research to study whether payday loan regulation can reduce crime in neighborhoods where payday loans used to be prevalent. Using the passage of the Illinois Payday Loan Reform Act, which restricted the loan amount, fees, terms, and number of concurrent loans among others, I found reduced property crimes in Chicago following the regulation yet no change in crimes without direct financial motivations. The property crime reduction was the most salient in median-income neighborhoods. The findings suggest that payday loan restrictions have alleviated the financial distress for payday loan consumers, especially those who had alternatives to payday loans. Theresearch paper"Payday Loan Regulation and Crime in the Neighborhood" is currently under review. To further understand the financial decision-making process for households and individuals, I also conductresearch to investigate the fundamental factor contributing to individual differences in financial management behaviors. Drawing evidence from a sample of young adults surveyed by the National Longitudinal Survey of Adolescent Health (Add Health), my coauthors and I have found that non-cognitive abilities such as personality traits affect individual's financial management behaviors. We summarize our preliminary results in a working paper entitled"Personality, Early Life Condition, and Young Adult Financial Behaviors and Outcomes". We have received additional funding to do further investigation.

Publications

• Type: Journal Articles Status: Under Review Year Published: 2015 Citation: Xu, Y. Mandatory savings, credit access and homeownership: The case of the housing provident fund.
• Type: Journal Articles Status: Under Review Year Published: 2015 Citation: Xu, Y. Payday loan regulation and crime in the neighborhood.
• Type: Conference Papers and Presentations Status: Accepted Year Published: 2015 Citation: Xu, Y., Beller, A., Roberts, B. and Brown, J. Personality, early life condition, and young adult financial behaviors and outcomes.

Progress 10/01/12 to 09/30/13

Outputs
Target Audience: Researchers in the area of consumer economics and urban affairs, e.g. the American Council of Consumer Interest (ACCI), the Asian Consumer and Family Economics Association, and theUrban Affair Association (UAA). Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Ms. Shanshan Wang was hired in fall 2013 as a research assistanton the project "Persoanlity Traits and Financial Outcomes". This project provides great opportunities for her to learn useful data analysis skills. How have the results been disseminated to communities of interest? I presented my paper "Credit Access and Housing Consumption: The Case of the Housing Provident Fund" in the 2013 Urban Affair Association meeting. The abstract of my project "Personality Traits and Financial Outcomes", collaborated with Drs. Andrea Beller, Brent Roberts, and Jeffery Brown, has been accepted to the 2014 American Social Science Association (ASSA) Annual Meeting in Philadelphia in early January, 2014. I am writing up a proposal entitled "The Financial Capability of Chinese Households: Evidence from the Survey of Chinese Consumer Finance and Investor Education" with Drs. Angela Lyons and Rui Yao for the 2014 Asian Consumer and Family Economics Association (ACFEA) meeting in Taiwan. What do you plan to do during the next reporting period to accomplish the goals? I plan to finish the two papers I initiated this year:"Personality Traits and Financial Outcomes" and"The Financial Capability of Chinese Households: Evidence from the Survey of Chinese Consumer Finance and Investor Education".

Impacts
What was accomplished under these goals? The project has two major goals. The first is to compare household finance between U.S. households and Chinese households. The second is to gain better understanding of the impact of mandatory saving for housing, i.e. the Housing Provident Fund program,on Chinese household's saving, investment, and consumption decisions. My work this year focused on achieving the first goal. In investigating household finance in the US and China, especially among the young adult population, I discovered that although households of young adults in these two countries face different challenges in credit use and investment, they have common difficulties in financial decision-making.To further investigate the financial decision-making process, I started two sub-projects. The first is a collaborative work with Drs. Andrea Beller, Brent Roberts, and Jeffery Brown, to investigate how personality traits affect the financial outcomes of US young adults. We have finished the data analysis and are going to report some preliminary results at the2014 American Social Science Association (ASSA) Annual Meeting. The second is a project with Drs. Angela Lyons and Rui Yao to investigatehow Chinese households makedecisions based on their financial knowledge. We have gathered the data we need and are doing the data analysis in preparation for a proposal to the2014Asian Consumer and Family Economics Association (ACFEA) meeting.

Publications

• Type: Conference Papers and Presentations Status: Accepted Year Published: 2014 Citation: Y. Xu, A.H. Beller and B.W. Roberts. Personality Traits and Financial Outcomes. American Social Science Association (ASSA) Annual Meeting.