Rethinking the Differential in Precautionay Savings between Black and White Americans
Benjamin K. Ofili

Abstract
This study investigates the differences in precautionary savings between black and white Americans using the theories of reasoned action and individualism and collectivism. A sample of 626 participated in the survey - 229 blacks and 397 whites. Study finds the reason for difference in savings between the groups is due to the influence of individualism and collectivism, which affects the saving decisions of the groups. While subjective norm and attitude affects saving behavior regardless of race, behavioral intent mediates the effects of both toward saving behavior. Attitude moderates the effect of individualism on saving behavior while subjective norm moderates the effect of collectivism on saving behavior. Blacks are highly different in collectivism compared to whites. Therefore, the influence on subjective norm and attitude and the relationship in moderation affects saving decisions differently between the groups, hence a difference in the precautionary savings behavior and outcome between blacks and whites.

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