A growing body of literature shows the importance of financial literacy in house-holds' financial decisions. However, fewer studies focus on understanding the determinants of financial literacy. Our paper fills this gap by analyzing a specific determinant, the educational system, to explain the heterogeneity in financial literacy scores across Germany. We suggest that the lower financial literacy observed in East Germany is partially caused by a different institutional framework experienced during the Cold War, more specifically, by the socialist educational system of the GDR which affected specific cohorts of individuals. By exploiting the unique set-up of the German reunification, we identify education as a channel through which institutions and financial literacy are related in the German context.
{"title":"Financial Literacy and Socialist Education: Lessons from the German Reunification","authors":"M. Davoli, J. Hou","doi":"10.2139/ssrn.3224207","DOIUrl":"https://doi.org/10.2139/ssrn.3224207","url":null,"abstract":"A growing body of literature shows the importance of financial literacy in house-holds' financial decisions. However, fewer studies focus on understanding the determinants of financial literacy. Our paper fills this gap by analyzing a specific determinant, the educational system, to explain the heterogeneity in financial literacy scores across Germany. We suggest that the lower financial literacy observed in East Germany is partially caused by a different institutional framework experienced during the Cold War, more specifically, by the socialist educational system of the GDR which affected specific cohorts of individuals. By exploiting the unique set-up of the German reunification, we identify education as a channel through which institutions and financial literacy are related in the German context.","PeriodicalId":252294,"journal":{"name":"Household Financial Planning eJournal","volume":"136 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114076030","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper estimates the determinants of financial literacy for school children and also evaluate the effectiveness of the SchoolBank project. SchoolBank is a standard educational module developed by National Bank of Georgia (NBG) in collaboration with Child and Youth Finance International (CYFI). The empirical results show that neither gender and grade nor the geographical location of the school and the source of income do not significantly affect the initial level of financial literacy of selected school children. But a positive interdependence between having a bank deposit and financial literacy is captured. Another contribution of the paper is to evaluate the effectiveness of the SchoolBank project. The study shows the overall improvement of financial literacy among selected school children. Furthermore, we observe that such an improvement of financial literacy is mostly driven by a significant increase of financial knowledge and attitudes, while the effect on financial behavior is very limited.
{"title":"Effectiveness of Financial Literacy Program at Schools. The Case Study of Schoolbank in Georgia","authors":"Irakli Barbakadze","doi":"10.2139/ssrn.3206094","DOIUrl":"https://doi.org/10.2139/ssrn.3206094","url":null,"abstract":"This paper estimates the determinants of financial literacy for school children and also evaluate the effectiveness of the SchoolBank project. SchoolBank is a standard educational module developed by National Bank of Georgia (NBG) in collaboration with Child and Youth Finance International (CYFI). The empirical results show that neither gender and grade nor the geographical location of the school and the source of income do not significantly affect the initial level of financial literacy of selected school children. But a positive interdependence between having a bank deposit and financial literacy is captured. Another contribution of the paper is to evaluate the effectiveness of the SchoolBank project. The study shows the overall improvement of financial literacy among selected school children. Furthermore, we observe that such an improvement of financial literacy is mostly driven by a significant increase of financial knowledge and attitudes, while the effect on financial behavior is very limited.","PeriodicalId":252294,"journal":{"name":"Household Financial Planning eJournal","volume":"314 ","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114049190","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Financial communication plays a crucial role in financial contexts affecting the attitude towards financial products, and thus, the investment behavior of individuals. Making financial decisions requires collecting and evaluating of a lot of financial information. If individuals attach interest in financial topics, and if so, which information sources they refer to when dealing with financial issues is determined by various factors such as demographic characteristics, social and cultural background, and also one’s financial capabilities. Using a random sample of working population in Austria, this survey exploits the relationship between information behavior in financial contexts and financial literacy. We further examine which factors might increase the individuals’ interest in financial news. Our results provide evidence of a significant association between financial literacy and the information sources investors prefer. The interest in financial news is not likely to be enhanced by more financial media reporting, but rather by more available time and financial knowledge. Overall, our results provide some interesting insights into information behavior of private investors in Austria and suggestions how financial communication could be improved.
{"title":"Financial Literacy, Information Behavior, and Interest in Financial News in Austria","authors":"Monika Kovarova-Simecek, Tatjana Aubram","doi":"10.2139/ssrn.3156961","DOIUrl":"https://doi.org/10.2139/ssrn.3156961","url":null,"abstract":"Financial communication plays a crucial role in financial contexts affecting the attitude towards financial products, and thus, the investment behavior of individuals. Making financial decisions requires collecting and evaluating of a lot of financial information. If individuals attach interest in financial topics, and if so, which information sources they refer to when dealing with financial issues is determined by various factors such as demographic characteristics, social and cultural background, and also one’s financial capabilities. Using a random sample of working population in Austria, this survey exploits the relationship between information behavior in financial contexts and financial literacy. We further examine which factors might increase the individuals’ interest in financial news. Our results provide evidence of a significant association between financial literacy and the information sources investors prefer. The interest in financial news is not likely to be enhanced by more financial media reporting, but rather by more available time and financial knowledge. Overall, our results provide some interesting insights into information behavior of private investors in Austria and suggestions how financial communication could be improved.","PeriodicalId":252294,"journal":{"name":"Household Financial Planning eJournal","volume":"59 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-04-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116515135","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Research has consistently shown that women’s involvement in household decision making positively affects household outcomes such as nutrition and education of children. Is financial literacy a determinant for women to participate in intra-household decision making? Using data on savings groups in Rwanda, we examine this relationship and show that women with higher financial literacy are more involved in financial and expenditure decisions. Instrumental variable estimations suggest a causal link. For this reason, we perform a decomposition analysis breaking down the gender gap in financial literacy into differences based on observed socio-demographic and psychological characteristics and differences in returns on these characteristics. Our results show high explanatory power by education, happiness, symptoms of depression and openness but also suggest that a substantial fraction can be explained by differences in returns. We argue that this results from a strong role of society and culture.
{"title":"Financial Literacy and Intra-Household Decision Making: Evidence from Rwanda","authors":"Antonia Grohmann, A. Schoofs","doi":"10.2139/ssrn.3132349","DOIUrl":"https://doi.org/10.2139/ssrn.3132349","url":null,"abstract":"\u0000 Research has consistently shown that women’s involvement in household decision making positively affects household outcomes such as nutrition and education of children. Is financial literacy a determinant for women to participate in intra-household decision making? Using data on savings groups in Rwanda, we examine this relationship and show that women with higher financial literacy are more involved in financial and expenditure decisions. Instrumental variable estimations suggest a causal link. For this reason, we perform a decomposition analysis breaking down the gender gap in financial literacy into differences based on observed socio-demographic and psychological characteristics and differences in returns on these characteristics. Our results show high explanatory power by education, happiness, symptoms of depression and openness but also suggest that a substantial fraction can be explained by differences in returns. We argue that this results from a strong role of society and culture.","PeriodicalId":252294,"journal":{"name":"Household Financial Planning eJournal","volume":"30 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114481999","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Financial illiteracy is widespread and leads to bad financial decisions (high debt, insufficient savings). Individuals cannot answer basic questions about inflation, compounding, and diversification. While financial literacy can be enhanced, are individuals teachable, and if so, what should they be taught and how lasting is the training? Prof. Merton suggests that some individuals can only be helped with innovation; Prof. Richard Thaler has argued for making the financial system more “user-friendly”. This paper argues that given the challenges posed by finance theory and financial instruments (in turn for financial literacy programs), a complementary approach along the lines of Profs. Merton’s and Thaler’s recommendations would introduce new financial instruments that embed goal-specific compounding and inflation protection. These interest-only real bonds (with goal-specific indexation), with a forward start date, would pay coupons for the period required for the respective goal. Further, there is ample potential supply from natural issuers. This innovation trivializes the investment problem to just simple multiplication or division thereby addressing the challenge of financial illiteracy with financial innovation across a range of saving/investment goals!
{"title":"Addressing Financial Illiteracy Through Financial Innovation: The Case for Goal-Specific Bonds the Embed Inflation and Compounding","authors":"A. Muralidhar","doi":"10.2139/ssrn.3093617","DOIUrl":"https://doi.org/10.2139/ssrn.3093617","url":null,"abstract":"Financial illiteracy is widespread and leads to bad financial decisions (high debt, insufficient savings). Individuals cannot answer basic questions about inflation, compounding, and diversification. While financial literacy can be enhanced, are individuals teachable, and if so, what should they be taught and how lasting is the training? Prof. Merton suggests that some individuals can only be helped with innovation; Prof. Richard Thaler has argued for making the financial system more “user-friendly”. This paper argues that given the challenges posed by finance theory and financial instruments (in turn for financial literacy programs), a complementary approach along the lines of Profs. Merton’s and Thaler’s recommendations would introduce new financial instruments that embed goal-specific compounding and inflation protection. These interest-only real bonds (with goal-specific indexation), with a forward start date, would pay coupons for the period required for the respective goal. Further, there is ample potential supply from natural issuers. This innovation trivializes the investment problem to just simple multiplication or division thereby addressing the challenge of financial illiteracy with financial innovation across a range of saving/investment goals!","PeriodicalId":252294,"journal":{"name":"Household Financial Planning eJournal","volume":"277 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-12-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123954322","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-12-13DOI: 10.18593/RACE.V16I3.13458
I. Felipe, H. Ceribeli, Túlio Queiroz Lana
Considering that the quality of financial decisions taken by individuals depends on their financial knowledge, abilities and attitudes, it is possible to state that the well-being of a population depends on how financially literate it is. In this context, the aim of this study was to measure the financial literacy level of university students in north of Mexico. The research method used was the survey and the data collected were analyzed using the structural equation modeling technique. As results, it was possible to confirm that financial attitudes of university students of north of Mexico influence their financial behavior. However, it was not confirmed that financial knowledge of these students impacts their financial behavior. As a high relationship between financial attitudes, financial behavior and financial knowledge of analyzed individuals was not found, it is concluded that the level of financial literacy of university students in the north of Mexico is low. It implies in the necessity to invest in financial literacy programs that could help this population to better manage their resources, what would certainly impact on its savings and consumption decisions, and retirement planning.
{"title":"Investigating the Level of Financial Literacy of University Students","authors":"I. Felipe, H. Ceribeli, Túlio Queiroz Lana","doi":"10.18593/RACE.V16I3.13458","DOIUrl":"https://doi.org/10.18593/RACE.V16I3.13458","url":null,"abstract":"Considering that the quality of financial decisions taken by individuals depends on their financial \u0000knowledge, abilities and attitudes, it is possible to state that the well-being of a population \u0000depends on how financially literate it is. In this context, the aim of this study was to measure \u0000the financial literacy level of university students in north of Mexico. The research method used \u0000was the survey and the data collected were analyzed using the structural equation modeling \u0000technique. As results, it was possible to confirm that financial attitudes of university students of \u0000north of Mexico influence their financial behavior. However, it was not confirmed that financial \u0000knowledge of these students impacts their financial behavior. As a high relationship between \u0000financial attitudes, financial behavior and financial knowledge of analyzed individuals was not \u0000found, it is concluded that the level of financial literacy of university students in the north of \u0000Mexico is low. It implies in the necessity to invest in financial literacy programs that could help \u0000this population to better manage their resources, what would certainly impact on its savings \u0000and consumption decisions, and retirement planning.","PeriodicalId":252294,"journal":{"name":"Household Financial Planning eJournal","volume":"85 2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-12-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127431334","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Korean Abstract: 본 연구는 한국FP학회 창립 10주년을 맞아 창간호에서부터 10권 3호까지 ｢Financial Planning Review(FPR)｣에 발표된 모든 논문을 분석하였다. 최현자 외 5인(2016)이 제시한 분석의 틀에 따라 지난 10년간 FPR에 발표된 총 185편의 논문을 핵심단어, 연구의 주제, 연구방법, 적용이론, 연구자를 기준으로 분석하였다. 그간 발표된 논문에는 총 694개의 서로 다른 핵심단어가 사용되었는데 가장 빈번하게 사용된 핵심단어는 보험 및 보험관련 용어(40회)이었으며, 다음으로는 펀드 및 펀드관련 용어(36회)로 나타났다. 가장 연구가 많이 수행된 주제는 투자설계 관련 영역(22.7%)이었으며 두 번째로 많이 수행된 연구 주제는 은퇴설계와 관련된 영역(11.4%)이었다. 주로 양적연구(82.3%)가 수행되었으며 적용이론을 명시적으로 드러낸 연구는 소수(13.5%)에 불과하였다. 단독연구(27.1%)보다는 공동연구가 많이 수행되었다. 연구동향 분석결과에 따라 명시적으로 이론을 적용하는 연구를 통한 개인재무설계 이론 정립을 꾀하고, 상대적으로 연구가 덜 수행된 세금설계, 상속 및 증여 설계, 부동산 설계 등 영역의 연구를 통하여 개인재무설계 연구를 보다 포괄적으로 수행할 것, 다양한 방법론을 적용하여 연구의 다양성을 꾀할 것을 제안하였다. 또한 지속적인 학문적 발전의 발판으로 핵심단어 및 용어의 통일에 대한 논의가 필요함을 제시하였다. English Abstract:This research reviewed the 10 years of Financial Planning Review since its first issue in 2008 and the most recent issue of August 2017. To analyze the total of 185 published articles in the FPR, the analytical framework of Choe et al. (2016) was utilized to examine keyword, research topics, methodology, theory, and authorship. A total of 694 different keyword has been used in the FPR for the past 10 years, among them ‘insurance’ and insurance related terms (N=40) have been most frequently used followed by ‘fund’ and fund related terms (N=36). The most popular research topic was investment planning (22.7%) followed by retirement planning (11.4%). The majority of research (82.3%) used quantitative approach and only 27.1% of the research was conducted by one-author. Based on these review results, it was suggested that more research should clearly present its theoretical framework, research effort on relatively under-published topics should be considered and research with more diverse methodology should be conducted. In addition discussion on the consistent use of the terminologies in financial planning research field is suggested.
Korean Abstract:本研究为迎接韩国FP学会创立10周年，对从创刊号到10卷3号在《Financial Planning Review(FPR)》上发表的所有论文进行了分析。根据崔贤子外5人(2016)提出的分析框架，以关键词、研究主题、研究方法、应用理论、研究者为标准，对过去10年间在FPR上发表的185篇论文进行了分析。期间发表的论文共使用了694个不同的关键词，使用最频繁的关键词是保险及保险相关用语(40次)，其次是基金及基金相关用语(36次)。研究最多的主题是投资设计相关领域(22.7%)，第二多的研究主题是退休设计相关领域(11.4%)。主要进行了量的研究(82.3%)，明确表明适用理论的研究只有少数(13.5%)。与单独研究(27.1%)相比，共同研究进行的更多。연구동향根据分析结果明确地适用理论的研究,通过谋求确立个人财务设计理论研究相对少一些,完成的税金、继承和赠与设计、房地产设计等领域的研究,通过个人财务设计将比研究全面执行,运用多种方法论研究提议谋求的多样性。他还指出，作为学术发展的跳板，有必要对关键词和用语的统一进行讨论。English Abstract:This research reviewed the 10 years of Financial Planning Review since its first issue in 2008 and the most recent issue of August 2017。To analyze the total of 185 published articles in the FPR, analytical framework of Choe et al. (2016) was utilized To examine keyword, research topics, methodology, theory, and authorship。A total of 694 different keyword has been used in the FPR for the past 10年among them‘insurance’and insurance related terms (N=40) have been most frequently used followed by‘fund’and fund related terms (N=36)。The most popular research topic was investment planning (22.7%) followed by retirement planning (11.4%)used quantitative approach and only 27.1% of The research was conducted by one-author。【参考答案】it was suggested that more research should clearly present its theoretical framework;research effort on relatively under-published topics should be considered and research with more diverse methodology should be conducted。In addition discussion on the consistent use of the terminologies In financial planning research field is suggested。
{"title":"개인재무설계 연구의 발자취: ｢Financial Planning Review｣ 10년의 연구 동향 분석 (Review of Personal Financial Planning Research: 10 Years of Financial Planning Review)","authors":"S. Joo, Hyuncha Choe","doi":"10.2139/SSRN.3084432","DOIUrl":"https://doi.org/10.2139/SSRN.3084432","url":null,"abstract":"Korean Abstract: 본 연구는 한국FP학회 창립 10주년을 맞아 창간호에서부터 10권 3호까지 ｢Financial Planning Review(FPR)｣에 발표된 모든 논문을 분석하였다. 최현자 외 5인(2016)이 제시한 분석의 틀에 따라 지난 10년간 FPR에 발표된 총 185편의 논문을 핵심단어, 연구의 주제, 연구방법, 적용이론, 연구자를 기준으로 분석하였다. 그간 발표된 논문에는 총 694개의 서로 다른 핵심단어가 사용되었는데 가장 빈번하게 사용된 핵심단어는 보험 및 보험관련 용어(40회)이었으며, 다음으로는 펀드 및 펀드관련 용어(36회)로 나타났다. 가장 연구가 많이 수행된 주제는 투자설계 관련 영역(22.7%)이었으며 두 번째로 많이 수행된 연구 주제는 은퇴설계와 관련된 영역(11.4%)이었다. 주로 양적연구(82.3%)가 수행되었으며 적용이론을 명시적으로 드러낸 연구는 소수(13.5%)에 불과하였다. 단독연구(27.1%)보다는 공동연구가 많이 수행되었다. 연구동향 분석결과에 따라 명시적으로 이론을 적용하는 연구를 통한 개인재무설계 이론 정립을 꾀하고, 상대적으로 연구가 덜 수행된 세금설계, 상속 및 증여 설계, 부동산 설계 등 영역의 연구를 통하여 개인재무설계 연구를 보다 포괄적으로 수행할 것, 다양한 방법론을 적용하여 연구의 다양성을 꾀할 것을 제안하였다. 또한 지속적인 학문적 발전의 발판으로 핵심단어 및 용어의 통일에 대한 논의가 필요함을 제시하였다. \u0000English Abstract:This research reviewed the 10 years of Financial Planning Review since its first issue in 2008 and the most recent issue of August 2017. To analyze the total of 185 published articles in the FPR, the analytical framework of Choe et al. (2016) was utilized to examine keyword, research topics, methodology, theory, and authorship. A total of 694 different keyword has been used in the FPR for the past 10 years, among them ‘insurance’ and insurance related terms (N=40) have been most frequently used followed by ‘fund’ and fund related terms (N=36). The most popular research topic was investment planning (22.7%) followed by retirement planning (11.4%). The majority of research (82.3%) used quantitative approach and only 27.1% of the research was conducted by one-author. Based on these review results, it was suggested that more research should clearly present its theoretical framework, research effort on relatively under-published topics should be considered and research with more diverse methodology should be conducted. In addition discussion on the consistent use of the terminologies in financial planning research field is suggested.","PeriodicalId":252294,"journal":{"name":"Household Financial Planning eJournal","volume":"572 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116065707","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper investigates whether higher financial literacy boosts demand for financial services in Indonesia. Our empirical results document that individuals with higher financial literacy are associated with higher demand for bank credit. However, the positive impact of financial literacy on demand for bank credit is more pronounced for younger and highly educated population. Demand for bank credit is also higher for individuals located close to post offices, suggesting that the development of hybrid bank lending products integrated with post-office services might be worth considering. Moreover, individuals with higher financial literacy also tend to have formal savings account, although this effect is more pronounced for older population and population with higher degree of education. Finally, higher demand for formal financial services is positively driven by the availability of publicly disseminated information about formal financial services, highlighting the importance of widening public awareness programs on financial literacy and inclusion across Indonesia.
{"title":"Financial Literacy and the Demand for Financial Services in Remote Areas: Evidence from Indonesia","authors":"Wahyoe Soedarmono, A. Prasetyantoko","doi":"10.2139/ssrn.3000339","DOIUrl":"https://doi.org/10.2139/ssrn.3000339","url":null,"abstract":"This paper investigates whether higher financial literacy boosts demand for financial services in Indonesia. Our empirical results document that individuals with higher financial literacy are associated with higher demand for bank credit. However, the positive impact of financial literacy on demand for bank credit is more pronounced for younger and highly educated population. Demand for bank credit is also higher for individuals located close to post offices, suggesting that the development of hybrid bank lending products integrated with post-office services might be worth considering. Moreover, individuals with higher financial literacy also tend to have formal savings account, although this effect is more pronounced for older population and population with higher degree of education. Finally, higher demand for formal financial services is positively driven by the availability of publicly disseminated information about formal financial services, highlighting the importance of widening public awareness programs on financial literacy and inclusion across Indonesia.","PeriodicalId":252294,"journal":{"name":"Household Financial Planning eJournal","volume":"68 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-11-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126303027","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Many consumers suffer from low levels of financial literacy, and attempts to increase this dimension of consumer expertise via educational interventions are typically unsuccessful. We propose that many of these apparent deficits in literacy and learning may be caused by a cognitively efficient distribution of responsibility for knowledge and decision-making in different domains between relationship partners. New relationship partners adopt specialized domains of responsibility quickly and intuitively in a process guided more by circumstantial factors than by matching tasks with aptitudes (study 1). Cross-sectional data from consumers in long-term relationships provide evidence that distributions of responsibility for financial decision-making between partners may give rise to differences in financial literacy, such that the financial specialist develops expertise in this area while the non-specialist does not (study 3). This ever-growing gap in financial literacy is generally unrecognized by consumers (studies 2, 4), despite being linked to corresponding differences in both financial decision-making (studies 5, 6) and financial information search (study 6). Consumers seem to develop expertise on a “need to know” basis. We argue that offloading responsibility to a relationship partner may eliminate this need in the present, while simultaneously creating barriers to developing expertise if and when it is needed in the future.
{"title":"On a Need-to-Know Basis: How the Distribution of Responsibility Between Couples Shapes Financial Literacy and Financial Outcomes","authors":"Adrian F. Ward, John G. Lynch","doi":"10.1093/jcr/ucy037","DOIUrl":"https://doi.org/10.1093/jcr/ucy037","url":null,"abstract":"Many consumers suffer from low levels of financial literacy, and attempts to increase this dimension of consumer expertise via educational interventions are typically unsuccessful. We propose that many of these apparent deficits in literacy and learning may be caused by a cognitively efficient distribution of responsibility for knowledge and decision-making in different domains between relationship partners. New relationship partners adopt specialized domains of responsibility quickly and intuitively in a process guided more by circumstantial factors than by matching tasks with aptitudes (study 1). Cross-sectional data from consumers in long-term relationships provide evidence that distributions of responsibility for financial decision-making between partners may give rise to differences in financial literacy, such that the financial specialist develops expertise in this area while the non-specialist does not (study 3). This ever-growing gap in financial literacy is generally unrecognized by consumers (studies 2, 4), despite being linked to corresponding differences in both financial decision-making (studies 5, 6) and financial information search (study 6). Consumers seem to develop expertise on a “need to know” basis. We argue that offloading responsibility to a relationship partner may eliminate this need in the present, while simultaneously creating barriers to developing expertise if and when it is needed in the future.","PeriodicalId":252294,"journal":{"name":"Household Financial Planning eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-09-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123066595","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
College is the overwhelming choice for high school graduates in the United States with over 2.2 million 2016 high school graduates enrolled in college (BLS, 2016). Those 2.2 million students represent about 70% of 2016 high school graduates (BLS, 2016). These new undergraduate college students face considerable opportunities and challenges. The many changes facing college students have been termed ecological transitions (Bronfenbrenner, 1979). The ecological transitions facing college students include less parental supervision, more autonomy and new interpersonal relationships (Holinka, 2015). Increased academic expectations, both real and perceived, influence feelings of stress (Holinka, 2015). The rate of increase in college student stress has been described as “alarming” (King, Vidourek, Merianous, & Singh, 2014, p. 133). The initiators of this stress, stressors, take many forms including academic pressures and lifestyle changes (Friedlander, Reid, Shupak, & Cribbie, 2007). It is well documented these academic and lifestyle changes do indeed create a feeling of stress in many college students (King, Vidourek, Merianous, & Singh, 2014). The negative impact of stress on health includes decreased mental acuity, depression, suicide and many physical ailments including musculoskeletal disorders (Bauer, Chesin, & Jeglic, 2014; Ekpenyong, Daniel, & Aribo, 2013; Lester, 2014; Pedersen, 2012; Pelletier, Lytle, & Laska, 2016). Students often choose to cope with their stress with risky lifestyle choices such as binge drinking, drug use and promiscuity (Lester, 2014; Pedersen, 2012; Pelletier, Lytle, & Laska, 2016). Feelings of stress have been shown to be mitigated by high levels of self-efficacy. Self-efficacy is the belief that a person can accomplish what they set out to do (Bandura, 1997). Similarly, feelings of stress can be mitigated by positive socialization by parents, other family members, teachers and social networks. The impact of stress is considerable and well documented. This research seeks to further understand how a student’s financial self-efficacy and financial socialization may impact those feelings of financial stress and their coping choices. This deeper understanding may provide insight into the steps parents, educators, counselors and others may take to mitigate a college student’s sense of financial stress thus limited their feeling of need to choose adverse coping options.
{"title":"The Influence of Financial Self-Efficacy and Financial Socialization on Student's Financial Stress and Coping Choices","authors":"Randy Kemnitz","doi":"10.2139/SSRN.3037695","DOIUrl":"https://doi.org/10.2139/SSRN.3037695","url":null,"abstract":"College is the overwhelming choice for high school graduates in the United States with over 2.2 million 2016 high school graduates enrolled in college (BLS, 2016). Those 2.2 million students represent about 70% of 2016 high school graduates (BLS, 2016). These new undergraduate college students face considerable opportunities and challenges. The many changes facing college students have been termed ecological transitions (Bronfenbrenner, 1979). The ecological transitions facing college students include less parental supervision, more autonomy and new interpersonal relationships (Holinka, 2015). Increased academic expectations, both real and perceived, influence feelings of stress (Holinka, 2015). The rate of increase in college student stress has been described as “alarming” (King, Vidourek, Merianous, & Singh, 2014, p. 133). The initiators of this stress, stressors, take many forms including academic pressures and lifestyle changes (Friedlander, Reid, Shupak, & Cribbie, 2007). It is well documented these academic and lifestyle changes do indeed create a feeling of stress in many college students (King, Vidourek, Merianous, & Singh, 2014). The negative impact of stress on health includes decreased mental acuity, depression, suicide and many physical ailments including musculoskeletal disorders (Bauer, Chesin, & Jeglic, 2014; Ekpenyong, Daniel, & Aribo, 2013; Lester, 2014; Pedersen, 2012; Pelletier, Lytle, & Laska, 2016). Students often choose to cope with their stress with risky lifestyle choices such as binge drinking, drug use and promiscuity (Lester, 2014; Pedersen, 2012; Pelletier, Lytle, & Laska, 2016). Feelings of stress have been shown to be mitigated by high levels of self-efficacy. Self-efficacy is the belief that a person can accomplish what they set out to do (Bandura, 1997). Similarly, feelings of stress can be mitigated by positive socialization by parents, other family members, teachers and social networks. The impact of stress is considerable and well documented. This research seeks to further understand how a student’s financial self-efficacy and financial socialization may impact those feelings of financial stress and their coping choices. This deeper understanding may provide insight into the steps parents, educators, counselors and others may take to mitigate a college student’s sense of financial stress thus limited their feeling of need to choose adverse coping options.","PeriodicalId":252294,"journal":{"name":"Household Financial Planning eJournal","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-09-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127450643","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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