Much of adult life is chock-full of responsibilities that require organization and timeliness, and acting on impulse is discouraged. In the workplace, employees are required to show up on time, dressed appropriately. Outside of work, quality credit ratings are maintained by paying bills on time.
But according to findings from researchers at The Ohio State University and University of Florida, adults with attention deficit hyperactivity disorder (ADHD) often struggle with financial skills and have difficulty resisting the impulsivity that often accompanies the disorder.
Ohio State Professors Dr. Theodore P. Beauchaine, of the Department of Psychology at the College of Arts and Sciences, and Dr. Itzhak Ben-David, of the Department of Finance at the Max M. Fisher College of Business, collaborated with Dr. Aner Sela, a marketing professor at the University of Florida’s Warrington College of Business on the study.
The researchers wanted to know whether economic behavior — credit card usage, employment history and debt management — is compromised for people with ADHD.
“For many people with ADHD, there is an outsized tendency to be impulsive and to place more emphasis on the present,” Ben-David said. “Our research examines how that present-focused tendency impacts these people’s financial lives. For example, we find that people with ADHD use payday loans more often, use pawn shops, pay late fees on credit card, have overdrafts on their bank accounts, and switch employers very often.”
View the journal article hereIn psychology, that behavior is referred to as impulsivity. In economics, it is often known as present bias. Present bias can take many forms. For example, we may plan for something to happen in the future, such as saving for retirement, but the long-term plan may be interrupted by an event that occurs in the present — such as an impulse purchase that derails the long-term savings plan. Other examples include someone choosing to indulge in the present despite being aware of harmful long-term effects, such as eating a dessert despite knowing it runs counter to a long-term plan of healthy eating, or smoking or binge drinking.
Using a standard psychological questionnaire, the researchers surveyed 544 adults with questions intended to identify ADHD tendencies and to measure their impulse control, which is affected by ADHD. Additionally, questions were asked to determine how the subjects managed their finances.
The test for present bias examined how willing subjects were to wait for a hypothetical reward. Subjects imagined that they could receive $120 as a reward in one week, and were asked to indicate the amount of money for which they would be willing to delay their reward by a full year. The larger the amount people require as compensation for the delay in getting their reward, the more impatient (or present-biased) they are considered.
The researchers found a link between ADHD symptoms and the tendency to exhibit present bias. Those who showed ADHD tendencies had a stronger preference for smaller short-term incentives as opposed to larger long-term ones.
“It’s possible that people with ADHD, who often exhibit impulsive tendencies, relate more to the present,” Ben-David said.
The impulsivity element drove the researchers’ results, Ben-David said, adding that previous research has found that more-impulsive people tend to have stronger present bias.
The research from Ben-David and his colleagues found that in the financial lives of people with the impulsive tendencies of ADHD, there is a greater likelihood that they will incur late fees, overdraw bank accounts, and have spotty employment records and shorter stints at each job. Importantly, these findings were observed over and above the effects of age, income, education and substance use.
“The research opens the door to many other questions regarding improving the everyday lives of people with ADHD,” Ben-David said. “Understanding where they struggle and why is an important part of the solution.”