Economic Locus of Control Scale

Abstract

The Economic Locus of Control Scale (ELOCS) is a comprehensive psychological instrument designed to assess an individual’s perception of the factors controlling their financial outcomes, wealth, and poverty. The scale measures the extent to which individuals believe economic success or failure is attributable to internal factors (e.g., ability, effort, careful investing) or external forces (e.g., chance, fate, or powerful others). The responses are typically gathered using a seven-point Likert-type scale, ranging from strong disagreement to strong agreement.

Keywords

Economic Locus of Control, financial attitudes, wealth, poverty attribution, psychological scale, financial security, Rotter, individual differences, economic beliefs.

Authors

Adrian Furnham (Primary Author), and colleagues.

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Purpose

The primary purpose of the ELOCS is to quantify individual differences in economic beliefs and attribution styles concerning financial status. It seeks to differentiate between those who attribute financial outcomes to personal control (internal locus) and those who attribute them to external forces, such as fate, luck, or powerful political/economic entities (external locus).

Understanding these attributions is crucial for studying behaviors related to saving, investment, entrepreneurship, and responses to economic inequality or poverty alleviation programs. The scale provides a robust measure for researchers investigating the psychological underpinnings of financial behavior and attitudes toward wealth distribution.

Construct

The scale measures Locus of Control (LOC) specifically within the domain of economic outcomes. LOC, originally conceptualized by Julian Rotter, describes how people perceive the source of control over events in their lives. The ELOCS operationalizes this concept by dividing economic attributions into distinct dimensions, typically categorized into Internal, External-Chance, and External-Powerful Others components.

Items focusing on ability, effort, and planning reflect the Internal Locus of Control. Items related to luck, fate, and accidental happenings tap into the External-Chance Locus. Finally, items mentioning powerful people, pressure groups, or politicians represent the External-Powerful Others Locus. This multi-dimensional approach provides a nuanced understanding of economic responsibility beliefs and their impact on personal finance.

Validity

Initial validation studies suggest strong construct validity, demonstrating that the ELOCS correlates significantly and appropriately with measures of related psychological constructs, such as general LOC, self-efficacy, and measures of financial literacy. Specifically, internal economic control tends to correlate positively with measures of proactive financial planning and negatively with fatalistic beliefs.

The scale also exhibits adequate content validity, as the 40 items cover a broad range of economic situations, including wealth acquisition, poverty prevention, savings protection, and political/social influences on finance. Further research has established its criterion validity by showing predictive power regarding real-world economic behaviors, such as debt management and long-term savings rates.

Reliability

The ELOCS demonstrates high levels of internal consistency. Early studies reported Cronbach’s alpha coefficients typically ranging from 0.75 to 0.90 across different subscales, indicating that the items within each dimension measure a unified underlying construct effectively. The overall scale reliability is considered robust for research applications.

Additionally, the scale exhibits acceptable test-retest reliability over short intervals (e.g., 4 to 6 weeks), suggesting that the measured economic attribution styles are stable traits rather than transient states. This stability supports its use in longitudinal studies examining changes in financial attitudes over time.

Factor Analysis

Exploratory and confirmatory factor analysis conducted during the scale development process typically identifies three primary factors underlying the 40 items. These factors correspond directly to the theoretical dimensions of the Locus of Control construct in the economic domain:

• Internal Economic Control (I): Belief that personal effort, ability, and hard work determine wealth and financial status.
• External Economic Control – Chance (E-C): Belief that luck, fate, fortune, or accidental happenings determine financial outcomes, regardless of personal effort.
• External Economic Control – Powerful Others (E-P): Belief that financial outcomes are controlled by powerful entities, governments, politicians, or strong pressure groups.

Instrument

Test Type: Self-report psychological inventory

Format: 40 items rated on a seven-point Likert-type scale (e.g., 1 = Strongly Disagree to 7 = Strongly Agree)

Language Available: English (Original); translations may exist in academic literature.

Population Group: General adult population; used widely in organizational and consumer psychology research.

Age Group: Typically 18 years and older.

Population Details: Originally validated on Western populations, including student and working adult samples, focusing on measuring economic attitudes.

Test Methodology: Pen-and-paper or digital administration; scoring involves calculating subscale means or totals for the Internal, External-Chance, and External-Powerful Others dimensions.

Keywords

Attribution theory, financial psychology, Internal Locus of Control, External Locus of Control, Furnham, economic beliefs, Likert scale, financial planning.

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Authors

Author ORCID Identifier: N/A (Information not publicly provided)

Affiliation Email addresses: [email protected]

Correspondence Address: Correspondence generally directed to Professor Adrian Furnham, likely affiliated with University College London (UCL) at the time of publication.

Permissions & Fee and Test Year

The scale is widely used in academic research and is often made available freely for non-commercial purposes, provided appropriate citation is given to the original author(s), primarily Adrian Furnham. Specific licensing or fees for commercial use must be obtained directly from the copyright holder. The scale was developed and introduced in the mid-1980s, often cited from works around 1986 or 1998.

Reference’s

The scale is referenced in numerous academic publications concerning economic psychology and individual differences. A related file view of the scale or associated research can be found here: http://www.sajip.co.za/index.php/sajip/article/viewFile/479/429

The original PDF can be downloaded here: http://www.sajip.co.za/index.php/sajip/article/viewFile/479/429

Furnham, A. (Year TBC). The Economic Locus of Control Scale: Development and validation. Relevant Journal Title.

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Items of the Economic Locus of Control Scale

IMPORTANT: The following scale items must be preserved in their original language and must not be changed in any way.

1. Becoming rich has little or nothing to do with chance
2. Saving and careful investing is a key factor in becoming rich.
3. Whether or not I become wealthy depends mostly on my ability.
4. Accountants can rarely do very much for people who are poor.
5. Anyone can learn a few basic economic principles that can go a long way in preventing poverty.
6. To a great extent my life is controlled by accidental happenings.
7. People’s poverty results from their own idleness.
8. Social workers relieve or cure only a few of the financial problems their clients have.
9. I feel that my finances are mostly determined by powerful people.
10. There is little one can do to prevent poverty.
11. No matter what anyone does‚ there will always be poverty.
12. When I make plans I am almost certain to make them work.

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13. Whether or not people get rich is often a matter of chance.
14. People who never become poor are just plain lucky.
15. There is no chance of protecting my savings from bad luck happenings.
16. The seriousness of poverty is overstated.
17. When it comes to wealth‚ there is no such thing as ‘bad luck’.
18. When I get what I want‚ it is usually because I am lucky.
19. In the long run‚ people who take care of their finances stay wealthy.
20. Relief from poverty requires good hard work more than anything else.
21. Although I might have the ability‚ I will not become better off without appealing to those in positions of power.
22. In the Western world there is no such thing as poverty.
23. Becoming rich has nothing to do with luck.
24. How many friends I have depends on how generous I am.
25. Most people are helped a great deal when they go to an accountant.

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26. There are a lot of financial problems that can be very serious indeed.
27. People like myself have little chance in protecting our personal interests when they are kin conflict with those of strong pressure groups.
28. Regarding money‚ there isn’t much you can do for yourself when you are poor.
29. Politicians can do very little to prevent poverty.
30. It’s not always wise for me to save because many things turn out to be a matter of good fortune or bad fortune.
31. If I become poor‚ it is usually my own fault.
32. Financial security is largely a matter of good fortune.
33. Getting what I want financially requires pleasing those people above me.
34. Whether or not I get to be well-off depends on whether I am lucky enough to be in the right place at the right time.
35. I can pretty much determine what will happen to me financially.
36. I am usually able to protect my personal interests.
37. When I get what I want‚ it is usually because I worked hard for it.
38. My life is determined by my own actions.
39. It is chiefly a matter of fate whether I become rich or poor.
40. Only those who inherit or win money can possibly become rich.