Informing Our Work

The academic investigation of financial wellness has been largely restricted to a relatively niche area of the social sciences that has not made full use of recent advances in mathematical modelling or machine learning. Much of the research has been disparate, with scholars pursuing specific questions and theories in isolation of a larger context. Regardless, there is a significant body of literature that can be drawn upon for the lab’s purposes.

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In general, the topics of spending, literacy, behaviour and demographics are thoroughly researched. Savings research tends to focus on investments, pensions and portfolios. Debt and income research is surprisingly sparse. Some academic work exists on modelling – prescriptive solutions to optimize outcomes for stylized households, for example.

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The existing empirical models for household wealth accumulation provide prescriptions for savings rates and investment allocations as a function of individual risk aversion and financial goals. The models are stochastic to incorporate both uncertain market returns (quantitative finance) and income/consumption shocks (actuarial analysis). Key drivers include the links between income-consumption, savings rate, risk attitudes, and the response to unforeseen shocks.

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Our listing below is a snapshot of some key sources in the literature. For a more in-depth exploration, consult our sources.