scholarly journals Financial Knowledge, Confidence, and Sustainable Financial Behavior

2021 ◽  
Vol 13 (19) ◽  
pp. 10926
Author(s):  
David Aristei ◽  
Manuela Gallo
Keyword(s):  
Causal Effect ◽  
Financial Knowledge ◽  
Financial Behavior ◽  
Financial Behaviors ◽  
Environmentally Responsible ◽  
Financial Investments ◽  
Information And Communication ◽  
Financial Market Participation ◽  
Objective Financial Knowledge ◽  
Investment Choices

This paper analyzes the effect of financial knowledge and confidence in shaping individual investment choices, sustainable debt behavior, and preferences for socially and environmentally responsible financial companies. Exploiting data from the “Italian Literacy and Financial Competence Survey” (IACOFI) carried out by the Bank of Italy in early 2020, we address potential endogeneity concerns in order to investigate the causal effect of objective financial knowledge on individual financial behaviors. To this aim, we perform endogenous probit regressions, using the respondent’s long-term planning attitude, the use of information and communication technology devices, and the financial knowledge of peers as additional instrumental variables. Our main empirical findings show that objective financial knowledge exerts a positive and significant effect on financial market participation and preferences for ethical financial companies. Moreover, we provide strong empirical evidence about the role of confidence biases on individual financial behaviors. In particular, overconfident individuals display a higher probability of making financial investments, experiencing losses due to investment fraud, and being over-indebted. Conversely, underconfident individuals exhibit suboptimal investment choices, but are less likely to engage in risky financial behaviors.

scholarly journals Competence, Confidence, and Gender: The Role of Objective and Subjective Financial Knowledge in Household Finance

2020 ◽  
Vol 41 (4) ◽  
pp. 626-638 ◽  
Author(s):  
Thérèse Lind ◽  
Ali Ahmed ◽  
Kenny Skagerlund ◽  
Camilla Strömbäck ◽  
Daniel Västfjäll ◽  
...  
Keyword(s):  
Cognitive Abilities ◽  
Financial Education ◽  
Financial Knowledge ◽  
Financial Behavior ◽  
Swedish Population ◽  
Financial Behaviors ◽  
Cognitive Reflection ◽  
And Gender ◽  
Objective Financial Knowledge ◽  
Subjective Financial Knowledge

AbstractWe studied the association of individual differences in objective financial knowledge (i.e. competence), subjective financial knowledge (i.e. confidence), numeric ability, and cognitive reflection on a broad set of financial behaviors and feelings towards financial matters. We used a large diverse sample (N = 2063) of the adult Swedish population. We found that both objective and subjective financial knowledge predicted frequent engagement in sound financial practices, while numeric ability and cognitive reflection could not be linked to the considered financial behaviors when controlling for other relevant cognitive abilities. In addition, both objective and subjective financial knowledge served as a buffer against financial anxiety, while we did not detect similar buffering effects of numeric ability and cognitive reflection. Subjective financial knowledge was found to be a stronger predictor of sound financial behavior and subjective wellbeing than objective financial knowledge. Women reported a lower level of subjective financial wellbeing even though they reported a more prudent financial behavior than men, when controlling for sociodemographics and cognitive abilities. Our findings help to understand heterogeneity in people’s propensity to engage in sound financial behaviors and have implications for important policy issues related to financial education.

Financial Literacy and Long- and Short-Term Financial Behavior in Different Age Groups

2016 ◽  
Vol 27 (1) ◽  
pp. 3-19 ◽  
Author(s):  
Robin Henager ◽  
Brenda J. Cude
Keyword(s):  
Financial Literacy ◽  
Financial Management ◽  
Age Groups ◽  
Financial Knowledge ◽  
Financial Behavior ◽  
Short Term ◽  
Financial Behaviors ◽  
Management Ability ◽  
Objective Financial Knowledge ◽  
Subjective Financial Knowledge

The purpose of this study was to examine the relationship between financial literacy and financial behaviors among various age groups. Financial literacy was measured in three ways: objective financial knowledge, subjective financial knowledge or confidence, and subjective financial management ability. The age groups were 18–24, 25–34, 35–44, 45–54, 55–64, and 65 and older. Long-term financial behavior referred to retirement saving and investing behavior, whereas short-term financial behavior referred to spending and emergency saving behavior. In the full sample, both objective and subjective financial literacy variables were positively associated with long- and short-term financial behaviors. In the age subsamples, subjective financial knowledge or confidence was more strongly related to long- and short-term financial behavior than either objective financial knowledge or subjective financial management ability in the younger age groups. In the older age groups, objective financial knowledge was more strongly related to long-term financial behavior than either of the other two measures of financial literacy.

A developmental model of financial capability

2013 ◽  
Vol 37 (4) ◽  
pp. 287-297 ◽  
Author(s):  
Joyce Serido ◽  
Soyeon Shim ◽  
Chuanyi Tang
Keyword(s):  
Transition To Adulthood ◽  
Well Being ◽  
Developmental Model ◽  
Financial Knowledge ◽  
Financial Behavior ◽  
Full Time ◽  
Financial Capability ◽  
Financial Behaviors ◽  
Roles And Responsibilities ◽  
Changing Knowledge

This study proposes a developmental model of financial capability to understand the process by which young adults acquire the financial knowledge and behaviors needed to manage full-time adult social roles and responsibilities. The model integrates financial knowledge, financial self-beliefs, financial behavior, and well-being into a single financial decision-making process. With two-time longitudinal survey data from college students ( N = 1,511; aged 18–23 years at Wave 1 and 21–26 years at Wave 2), the findings provide support for a pattern of co-occurring change: changing knowledge about personal finances associated with changing self-beliefs about finances; changing self-beliefs associated with changing financial behaviors; and changing financial behaviors ultimately associated with changes in financial and overall well-being. We discuss the findings in the context of facilitating a positive transition to adulthood during widespread economic uncertainty.

scholarly journals Factors Affecting Financial Behaviors:

2021 ◽  
Vol 1 (2) ◽  
pp. 191-204
Author(s):  
Jean Adriani
Keyword(s):  
Locus Of Control ◽  
Mental Accounting ◽  
Risk Tolerance ◽  
Partial Least Square ◽  
Least Square ◽  
Financial Knowledge ◽  
Financial Behavior ◽  
Factors Affecting ◽  
Financial Behaviors ◽  
Control Motivation

This study was conducted to determine the effect of financial knowledge, financial attitude, locus of control, risk tolerance, motivation, and mental accounting on financial behavior. The population was 168 students majoring in International Business Management at Universitas Ciputra Surabaya. The characteristics of the respondents are students who are in the 6th semester and above at the time of taking the sampling with purposive sampling method. The data obtained were analyzed using Partial Least Square (PLS).  The result shows that the factors of financial knowledge, locus of control, motivation, have no effect on financial behavior. While the factors of financial attitude, risk tolerance, and mental accounting have an effect on financial behavior.

scholarly journals On Present Value Evaluation under the Impact of Behavioural Factors Using Oriented Fuzzy Numbers

Symmetry ◽  
2021 ◽  
Vol 13 (3) ◽  
pp. 468
Author(s):  
Krzysztof Piasecki ◽  
Anna Łyczkowska-Hanćkowiak
Keyword(s):  
Fuzzy Numbers ◽  
Asset Price ◽  
Financial Knowledge ◽  
Present Value ◽  
Market Knowledge ◽  
Value Evaluation ◽  
Starting Point ◽  
Behavioural Factors ◽  
Objective Financial Knowledge ◽  
The Impact

In general, the present value (PV) concept is ambiguous. Therefore, behavioural factors may influence on the PV evaluation. The main aim of our paper is to propose some method of soft computing PV evaluated under the impact of behavioural factors. The starting point for our discussion is the notion of the Behavioural PV (BPV) defined as an imprecisely real-valued function of distinguished variables which can be evaluated using objective financial knowledge or subjective behavioural premises. In our paper, a BPV is supplemented with a forecast of the asset price closest to changes. Such BPV is called the oriented BPV (O-BPV). We propose to evaluate an O-BPV by oriented fuzzy numbers which are more useful for portfolio analysis than fuzzy numbers. This fact determines the significance of the research described in this article. O-BPV may be applied as input signal for systems supporting invest-making. We consider here six cases of O-BPV: overvalued asset with the prediction of a rise in its price, overvalued asset with the prediction of a fall in its price, undervalued asset with the prediction of a rise in its price, undervalued asset with the prediction of a fall in its price, fully valued asset with the prediction of a rise in its rice and fully valued asset with the prediction of a fall in its rice. All our considerations are illustrated by numerical examples. Presented examples show the way in which we transform superposition of objective market knowledge and subjective investment opinion into simple return rate.

scholarly journals Some Insights Into Financial Literacy Among Undergraduate Students: A Case of Bosnia and Herzegovina

2021 ◽  
Vol 12 (3) ◽  
pp. 103
Author(s):  
Jasmina Okicic ◽  
Meldina Kokorovic Jukan ◽  
Mensur Heric
Keyword(s):  
Undergraduate Students ◽  
Financial Literacy ◽  
Sampling Technique ◽  
Financial Education ◽  
Financial Knowledge ◽  
Financial Behavior ◽  
Financial Attitudes ◽  
Significant Difference ◽  
Financial Behaviour ◽  
The Relationship

The purpose of this research is to provide some insights into financial literacy among undergraduate students focusing primarily on the relationship between financial knowledge, financial attitudes and financial behavior and on possible gender and financial education gap in financial literacy. Using the purposive sampling technique, data collection was carried out from April to June 2020, yielding a sample of 1,046 valid responses. To gain a better understanding of the relationship between financial behaviour, financial attitudes and financial knowledge, we, primarily, use exploratory factor analysis and multiple regression model. The research findings have revealed several important issues. First, findings have suggested that financial knowledge, financial attitudes and gender may be considered as an antecedent of the financial behaviour of undergraduate students. Second, findings have also suggested a statistically - significant difference between the financial literacy of undergraduate students concerning their exposure to formal financial education.

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