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Financial Literacy And French Behaviour On The Stock Market, Luc Arrondel
Financial Literacy And French Behaviour On The Stock Market, Luc Arrondel
Numeracy
This article looks back over the different dimensions of financial literacy: theoretical, methodological, empirical and political. The theoretical foundations of the notion of financial literacy are presented with reference to recent contributions by psychological or behavioural economics: “household finance” refers to the concept of financial literacy based on the empirical dead-ends of standard saver theory. This raises the fundamental question as to how to measure and evaluate financial literacy. Here, we are especially interested in the empirical robustness of a standard measure of financial literacy based on three straightforward questions (interest calculations, notion of inflation and risk diversification). Is this …
Actual And Self-Assessed Financial Literacy Among Employees Of A South African University, Gizelle D. Willows
Actual And Self-Assessed Financial Literacy Among Employees Of A South African University, Gizelle D. Willows
Numeracy
This study examines the level of financial literacy and self-assessed financial literacy amongst members of a South African tertiary institution’s retirement fund. Based on surveys of the fund’s members, I employ descriptive statistics and multivariate regression analyses to examine differences in financial literacy within and across groups. The results show that, despite working for an employer implementing many best practices identified by financial literacy advocates, respondents from all demographic subgroups possess relatively low levels of financial knowledge. Men, White respondents, and those with a higher cost of employment or higher educational attainment were more likely to have a higher level …
The Connection Between Financial Literacy And Numeracy: A Case Study From India, J.D Jayaraman, Saigeetha Jambunathan, Kenneth Counselman
The Connection Between Financial Literacy And Numeracy: A Case Study From India, J.D Jayaraman, Saigeetha Jambunathan, Kenneth Counselman
Numeracy
Making financial decisions involves mathematical calculations, both simple and complex. It is a well-documented fact that financial literacy levels among young people all over the world are quite low and that these low levels contribute to various undesirable outcomes with respect to personal financial well-being and the economy as a whole. This study explores the relationship between financial literacy and numeracy by measuring and modeling the relationship between financial literacy and numeracy levels among high school students (N = 586) in India. The results show a strong relationship between numeracy and financial literacy skills. Low numeracy is associated with …
Financial Literacy And The Success Of Small Businesses: An Observation From A Small Business Development Center, Pearl Dahmen, Eileen Rodríguez
Financial Literacy And The Success Of Small Businesses: An Observation From A Small Business Development Center, Pearl Dahmen, Eileen Rodríguez
Numeracy
Small business is the backbone of the U.S. economy; when the financial literacy skills of entrepreneurs fall short of those needed to operate a successful business, it is more than the individual business at risk. In 2012, 14 small businesses requesting growth-acceleration consulting services from the Florida Small Business Development Center at the University of South Florida were assessed financially as part of the service provided by the Center. Financial ratios were used to analyze the business’s financial condition. While performing the financial analysis of these firms, we also surveyed the business owners to determine their level of financial understanding …
Financial Literacy And Household Savings In Romania, Elisabeth Beckmann
Financial Literacy And Household Savings In Romania, Elisabeth Beckmann
Numeracy
We present new evidence from the Euro Survey of the Austrian Central Bank on the level of financial literacy in Romania and analyze how financial literacy is related to household savings. Less than 5% of respondents were able to correctly answer the three “core” financial literacy questions on interest compounding, inflation, and risk diversification, with the risk diversification question posing the greatest difficulties. Twenty percent of respondents are able to answer both the interest compounding and inflation questions correctly. Financial literacy levels differ between regions and across rural and urban areas. Older and less-educated individuals perform worst on the financial …
Financial Literacy And Financial Planning In France, Luc Arrondel, Majdi Debbich, Frédérique Savignac
Financial Literacy And Financial Planning In France, Luc Arrondel, Majdi Debbich, Frédérique Savignac
Numeracy
We study financial literacy in France using the PATER survey and following the Lusardi and Mitchell (2011c) approach. We find that some subpopulations are less financially literate than others: women, young and old people as well as less-educated people are more likely to face difficulties when dealing with fundamental financial concepts such as risk diversification and inflation and interest compounding. We also find some differences in financial knowledge depending on the political opinion of the respondents. Finally we show that these differences in financial knowledge are correlated with differences in the propensity to plan: people who score higher on the …
Financial Literacy And Retirement Planning In Switzerland, Martin Brown, Roman Graf
Financial Literacy And Retirement Planning In Switzerland, Martin Brown, Roman Graf
Numeracy
We use a representative survey covering 1,500 households to document the level of financial literacy in Switzerland and to examine how financial literacy is related to retirement planning. We measure financial literacy with standardized questions that capture knowledge about three basic financial concepts: Compound interest, inflation, and risk diversification. We measure retirement planning by the incidence of a voluntary retirement savings account. Our results show that financial literacy in Switzerland is high by international standards--a result which is compatible with the high ranking of Switzerland on the PISA mathematical scales. Financial literacy is lower among low-income, less-educated, and immigrant, non-native-speaking …
Financial Literacy And Financial Behavior Among Young Adults: Evidence And Implications, Carlo De Bassa Scheresberg
Financial Literacy And Financial Behavior Among Young Adults: Evidence And Implications, Carlo De Bassa Scheresberg
Numeracy
This paper uses data from the 2009 National Financial Capability Study to examine financial literacy and financial behavior in a sample of approximately 4,500 young adults age 25 to 34. The paper finds that most young adults lack basic financial knowledge. Financial literacy is especially low among certain demographic groups, such as women, minorities, and lower-income or less-educated people. A high level of education, however, is not a guarantee of financial literacy. Only 49% of young respondents with a college education and 60% of young respondents with postgraduate education could correctly answer three simple questions designed to assess financial literacy. …
Financial Literacy And Credit Card Behaviors: A Cross-Sectional Analysis By Age, Sam Allgood, William Walstad
Financial Literacy And Credit Card Behaviors: A Cross-Sectional Analysis By Age, Sam Allgood, William Walstad
Numeracy
In this study, we use a measure of financial literacy that includes both a test score of actual financial literacy and a self-rating of perceived financial literacy to investigate how financial literacy affects five credit card behaviors: (1) always paying a credit card balance in full; (2) carrying over a credit card balance and being charged interest; (3) making only a minimum payment on a credit card balance; (4) being charged a fee for a late payment; and (5) being charged a fee for exceeding a credit limit. Probit analysis was used to assess each behavior with a large nationally …
The Geography Of Financial Literacy, Christopher Bumcrot, Judy Lin, Annamaria Lusardi
The Geography Of Financial Literacy, Christopher Bumcrot, Judy Lin, Annamaria Lusardi
Numeracy
This paper explores how well equipped today’s households are to make complex financial decisions in the face of often high-cost and high-risk financial instruments. Specifically we focus on financial literacy. Most importantly, we describe the geography of financial literacy, i.e., how financial literacy is distributed across the fifty US states. We describe the correlation of financial literacy and some important aggregate variables, such as state-level poverty rates. Finally, we examine the extent to which differences in financial literacy can be explained by states’ demographic and economic characteristics. To assess financial literacy, five questions were added to the 2009 National Financial …
Numeracy, Financial Literacy, And Financial Decision-Making, Annamaria Lusardi
Numeracy, Financial Literacy, And Financial Decision-Making, Annamaria Lusardi
Numeracy
Financial decisions, be they related to asset building or debt management, require the capacity to do calculations, including some complex ones. But how numerate are individuals, in particular when it comes to calculations related to financial decisions? Studies and surveys implemented in both the United States and in other countries that are described in this paper show the level of numeracy among the population to be very low. Moreover, lack of numeracy is not only widespread but is particularly severe among some demographic groups, such as women, the elderly, and those with low educational attainment. This has potential consequences for …
Quantitative Literacy At Michigan State University, 2: Connection To Financial Literacy, Dennis Gilliland, Vince Melfi, Alla Sikorskii, Edward Corcoran, Eleanor Melfi
Quantitative Literacy At Michigan State University, 2: Connection To Financial Literacy, Dennis Gilliland, Vince Melfi, Alla Sikorskii, Edward Corcoran, Eleanor Melfi
Numeracy
The lack of capability of making financial decisions has been recently described for the adult United States population. A concerted effort to increase awareness of this crisis, to improve education in quantitative and financial literacy, and to simplify financial decision-making processes is critical to the solution. This paper describes a study that was undertaken to explore the relationship between quantitative literacy and financial literacy for entering college freshmen. In summer 2010, incoming freshmen to Michigan State University were assessed. Well-tested financial literacy items and validated quantitative literacy assessment instruments were administered to 531 subjects. Logistic regression models were used to …
Four Popular Books On Consumer Debt: A Context For Quantitative Literacy, Andrew J. Miller
Four Popular Books On Consumer Debt: A Context For Quantitative Literacy, Andrew J. Miller
Numeracy
The topics of credit cards, mortgages, subprime lending, and fringe banking are rich sources of problems and discussions for classes focused on quantitative literacy. In this theme book review, we look at four recent books on the consumer debt industry: Credit Card Nation, by Robert Manning; Maxed Out, by James Scurlock; Collateral Damaged, by Charles Geisst; and Broke, USA, by Gary Rivlin. Credit Card Nation takes a scholarly look at the history of credit in America with a focus on the genesis and growth of the credit card industry up to the turn of the 20th century. Maxed Out also …