Asset Building Working Paper

Effects of Assets on Attitudes and Behaviors: Advance Test of a Social Policy Proposal

Raising asset limits and creating individual development accounts have been proposed in welfare reform. In part the rationale for these proposals is that assets have positive effects on attitudes and behaviors, including long-term planning, greater work effort, and improved social connectedness. The Panel Study of Income Dynamics (PSID), between 1968 and 1972, included a wide range of attitude and behavioral measures. In this study, data from the PSID are analyzed to test for the following: a) the effect of assets on attitudes and behaviors; b) the effect of attitudes and behaviors on assets; c) the effect of income on attitudes and behaviors; and d) the effect of attitudes and behaviors on income. a path analytic model is estimated using LISREL. Results indicate modest effects of some assets that are (a) consistently positive as predicted, and (b) overall as strong as the effects of income. Results support the proposition that assets have a positive effect on expectations and confidence about the future; influence people to make specific plans with regard to work and family; induce more prudent and protective personal behaviors; and lead to more social connectedness with relatives, neighbors, and organizations. These results suggest that policy demonstrations are desirable.Certainly this is not the only way to conceptualize social development, but it is an approach that may be productive. Given the state of theoretical underdevelopment in the field of social development, the process of specifying testable propositions as demonstrated in this paper might serve as a model for the systematic investigation of other social development issues. Testable propositions are building blocks that can bring discipline and greater research productivity to social development scholarship.



Yadama, G., & Sherraden, M. (1995). Effects of assets on attitudes and behaviors: Advance test of a social policy proposal (CSD Working Paper 95-02). St. Louis, MO: Washington University, Center for Social Development.