Beyond hardships: examining prosocialness as a catalyst for positive financial behavior

This study examines whether prosocialness, a positive psychological response to economic hardship, can foster responsible financial behavior. While much of the behavioral finance literature emphasizes adverse reactions to crises, such as financial anxiety and reduced risk tolerance, we investigate prosocialness as a constructive pathway. Drawing on prospect theory, utility theory, altruism, and the tend-and-befriend framework, we develop and test a model linking prosocialness, financial anxiety, risk tolerance, and financial behavior. Based on survey data from 357 individuals in the Delhi-NCR region, analyzed through PLS-SEM and ANN, the study reveals that prosocial individuals exhibit stronger financial discipline and higher financial well-being. This study contributes to behavioral finance by positioning prosocialness as a factor that can offset the negative impact of economic stress, rather than assuming individuals always respond with risk aversion. The findings also point to practical steps. Policymakers, financial practitioners, and service providers can draw on the results to design programmes that weave prosocial values into financial education, community saving initiatives, and responsible investment. Our conclusions are relevant to emerging economies seeking inclusive growth and to global discussions on inequality and the UN Sustainable Development Goals. By employing both PLS-SEM and ANN, the study offers a robust and reliable test of the model.