Trust, financial literacy, and financial market participation

2021 ◽  
pp. 1-31
Author(s):  
Jill E. Fisch ◽  
Jason S. Seligman
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Financial Literacy ◽  
Well Being ◽  
Retirement Savings ◽  
Willingness To Participate ◽  
Market Participation ◽  
Key Factors ◽  
Financial Market Participation ◽  
The Relationship

Abstract Willingness to participate in financial markets is important for financial well-being, including the accumulation of retirement savings through self-directed pension programs. We consider the roles of two key factors, trust and financial literacy in financial market participation. We find both are strongly related to participation. Although trust is more uniformly correlated with increases in financial market participation, the relationship between financial literacy and engagement is u-shaped, with increases in financial literacy first associated with reductions and subsequently with increases in the levels of participation. Our findings suggest trust and financial literacy play different roles and that each is related to investment behaviors in important ways.

scholarly journals Fintech Penetration, Financial Literacy, and Financial Decision-Making: Empirical Analysis Based on Tar

Complexity ◽  
2020 ◽  
Vol 2020 ◽  
pp. 1-12
Author(s):  
Yi Li ◽  
Zhengwang Li ◽  
Fan Su ◽  
Qiteng Wang ◽  
Qian Wang
Keyword(s):  
Decision Making ◽  
Financial Market ◽  
Financial Literacy ◽  
Mediating Effect ◽  
Insurance Market ◽  
Market Participation ◽  
Financial Decision Making ◽  
Financial Decision ◽  
Financial Market Participation ◽  
Financial Technology

The level of financial literacy of rural residents will affect their financial decisions and the financial well-being behind the decisions. This paper uses mediating effect and moderating effect to test the influence path of rural residents’ subjective and objective financial literacy on their financial decision-making with survey data from Henan and Anhui provinces in China. The results show that subjective and objective financial literacy have positive effects on financial market participation. Subjective and objective financial literacy have negative direct effects on insurance market participation. Subjective financial literacy plays an incomplete mediating effect in the impact of objective financial literacy on financial market and insurance market participation. Objective financial literacy is adjusted by subjective financial literacy on financial market participation and insurance market participation. At the same time, we introduce financial technology penetration as a threshold variable in the model and find that the financial literacy has stronger impact on financial decision-making if the financial technology penetration is above the threshold.

Trust and Household Portfolios

2021 ◽  
pp. 78-97
Author(s):  
Diego Lubian
Keyword(s):  
Financial Markets ◽  
Empirical Evidence ◽  
Financial Literacy ◽  
Risky Assets ◽  
Financial Decisions ◽  
Portfolio Decisions ◽  
Financial Decision ◽  
Financial Portfolio ◽  
Socio Demographic Factors ◽  
The Relationship

This article provides empirical evidence on the existence and the extent of the influence of trust in financial decisions using individual data on Italian households from the Survey on Household Income and Wealth, 2010. This article studies the relationship between, trust in people, trust in banks and more detailed previously unexplored dimensions of trust, and household financial portfolio decisions. The article provides empirical evidence that trust in people and trust in banks affect both participation in financial markets, the share of risky assets and the diversification of the financial portfolio, controlling socio-demographic factors, risk aversion, and financial literacy as well. The article finds that trust is important for individuals with a lower level of education who have limited possibilities to acquire and process information on financial markets need to rely in trustworthy relationship to define their financial portfolio. Further, we present evidence that the main channel by which trust affects financial decision making and determines too little participation, a lower share of risky assets in the financial wealth and poorly diversified portfolios is trust in family and friends.

Orthopaedic Surgery Resident Financial Literacy: An Assessment of Knowledge in Debt, Investment, and Retirement Savings

2019 ◽  
Vol 85 (4) ◽  
pp. 353-358 ◽  
Author(s):  
John D. Jennings ◽  
Courtney Quinn ◽  
Justin A. Ly ◽  
Saqib Rehman
Keyword(s):  
United States ◽  
Orthopedic Surgery ◽  
Financial Literacy ◽  
Financial Education ◽  
Retirement Planning ◽  
The United States ◽  
Financial Knowledge ◽  
Retirement Savings ◽  
Willingness To Participate ◽  
Formal Curriculum

Most orthopedic residents carry significant debt and may enter their practice with little knowledge of business management, minimal retirement savings, and overall poor financial literacy. This study aimed to gauge financial literacy, debt, and retirement planning in United States orthopedic surgery residents. Willingness to participate in formalized financial education was also assessed. Eighty-five allopathic orthopedic surgery residents in the United States completed a 14-question anonymous online survey in 2016. The survey assessed demographic data, self-assessed financial knowledge, amount of credit card debt and loans, preparation for retirement, and willingness to participate in formal didactic education on these topics. Most respondents derive their financial knowledge from personal research (51%), whereas only 4 per cent have a formal curriculum. Despite most respondents reporting more than $200,000 in outstanding loans, only 31 per cent create and stick to a budget. Few programs offer retirement advice, and 48 per cent of respondents save $0 toward retirement. Eighty-five per cent of residents expressed interest in learning about personal investment, savings, and retirement planning. Orthopedic surgery residents carry significant debt and do not achieve their high-income potential until disproportionately later in life. Only 4 per cent of residents have formal training in investing, personal finance, or retirement despite a majority who desire such a curriculum. In fact, almost 75 per cent of those surveyed felt less prepared for retirement than their peers outside of medical training. This study suggests a role for formal financial education in the orthopedic curriculum to prepare residents for retirement, improve financial literacy, and enhance debt management.

scholarly journals Financial Market Participation Of Immigrants And Native-Born Americans: The Role Of Income Uncertainty

2011 ◽  
Vol 8 (5) ◽  
Author(s):  
Swarn Chatterjee
Keyword(s):  
Financial Market ◽  
The United States ◽  
Risk Tolerance ◽  
Individual Investors ◽  
Financial Asset ◽  
Asset Ownership ◽  
Market Participation ◽  
Income Uncertainty ◽  
Financial Market Participation

This paper uses the National Longitudinal Survey dataset to examine the role of income uncertainty in explaining the likelihood of financial asset ownership among native-born and immigrant Americans. After controlling for a number of socioeconomic, demographic and behavioral factors, the results suggest that individual investors who face greater income uncertainty are less likely to own financial assets. This relationship holds true for immigrants and native-born Americans. Additionally, the likelihood of financial asset ownership increases with income, risk tolerance, and educational attainment for immigrants as well as for natives. Results also suggest that financial market participation among immigrants increases with the number of years they remain in the United States.

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