This post created by new NGPF team member, Christian Sherrill: 

If you’re a rabid TED Talks fan, as I am, you’ll probably remember Yale Economist Keith Chen’s fascinating talk about the impact of grammar on savings behavior.

Now famously, Chen concluded that - well, I’ll let you learn about it on your own terms:

1. Video summary (5:53)
2. Full text of study: The Effect of Language on Economic Behavior: Evidence from Savings Rates, Health Behaviors, and Retirement Assets 
3. Criticisms of study
4. Full TED talk (12:00)

This oldie-but-goodie 2013 academic paper can be a great conversation starter for our students as they think through the abstract process of weighing future consumption with current consumption, credit and savings. Plus, this discussion is hot in the news this week with American millennials’ savings and credit behaviors catching some press.

Possible discussion questions:

• What differences did Chen notice in savings behavior between countries?
• If you could design a language, how would you help the speakers of that language save more money? What would the language sound like?
• What were the primary criticisms levied against Chen’s research? Do you agree? Disagree? What evidence do you have supporting your agreement or disagreement?
• Why do you think there are differences between countries’ saving habits?
• Do you agree with Chen’s conclusion? What evidence can you find to back your position?
• What other factors could be affecting how different countries save and spend money?
• What factors affect your family’s saving and spending habits?

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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