Scarcity of time and saving behaviour

Scarcity of any kind of resource leads to cognitive load followed by poor decision-making. Time scarcity is a frequently occurring problem and has a negative impact on economic behaviour such as borrowing. Previous research has shown that saving behaviour is also affected by money scarcity as the act of saving requires cognitive capacity, however, scarcity of time has not been linked to it yet. This study examines the relationship between time scarcity and saving behaviour. An online experiment was conducted (n = 170) to test whether scarcity of time affects decision-making with regard to saving while one performs on a cognitive test. In the 2 x 2 between-subjects design, participants were assigned either a high (time-rich) or a low (time-poor) time budget to manipulate time scarcity. Moreover, in two conditions a saving option was implemented to observe saving behaviour. Raven’s Progressive Matrices test was used to alter cognitive capacity and task performance was determined by the score on this test. Results show that the option to save has a positive effect on performance for the time-rich and no effect for the time-poor. Moreover, participants experiencing scarcity had lower relative saving rates but a higher score efficiency. No narrowed visual attention effects were found. Implications are in line with the existing scarcity literature, suggesting creating slack to escape one’s scarcity loop. In addition, it is suggested that the enhanced focus that scarcity induces should be used to increase saving rates. Future research should focus on ways to implement the proposed solutions and identify other solutions.