Asset accumulation, financial inclusion and subjective well‐being: The role of financial formality in South Africa's households

Abstract

Asset building and financial inclusion programmes have contributed to the enhancement of consumers' welfare through asset accumulation. Employing the FinScope consumer survey for South Africa, we extended the analysis of the relationship between financial inclusion and asset holding by examining whether this, in turn, improves consumers' subjective well‐being (SWB). Financial inclusion was captured by credit, savings, and insurance whereas multiple correspondence analysis was employed to compute an asset index that captured indicators of individual material possessions. Results from the partial least squares path model suggested that financial inclusion had an indirect positive association with consumers' SWB through increased asset holding, but the association was more pronounced via formal channels of saving, credit, and insurance. As such, social policymakers are encouraged to integrate access to insurance, credit, and savings through formal channels in poverty interventions since this has a greater indirect association with consumers' SWB via increased asset ownership.

Three approaches to modeling the relationship among durable goods, academic achievement, and school attendance in Colombia1

“… [ 3 ] Condi. [ 4 ] Index Internet 0.04*** (0.004) 0.01*** (0.004) PC 0.04*** (0.004) 0.04*** (0.004) TV −0.03*** (0.004) −0.03*** (0.004) Washing machine 0.10*** (0.004) 0.09*** (0.004) Microwave 0.02*** (0.003) 0.01*** (0.003) Car −0.10*** (0.003) −0.08*** (0.003) Videogame console −0.08*** (0.003) −0.07*** (0.003) Sex 0.12*** (0.003) 0.13*** (0.003) 0.13*** (0.003) 0.14*** (0.003) −0.14*** (0.003) −0.14*** (0.003) −0.14*** (0.003) −0.13*** (0.003) School grade 0.08*** (0.003) 0.09*** (0.003) 0.09*** (0.003) 0.10*** (0.003) 0.15*** (0.003) 0.15*** (0.003) 0.15*** (0.003) 0.16*** (0.003) Preschool 0.21*** (0.003) 0.22*** (0.003) 0.22*** (0.003...…”

“…Assets are important for reducing poverty because they create capacity-building opportunities, which allow families to prepare for economic hardship and improve their standards of living [ [1] , [2] , [3] ]. As opposed to income, which is the flow of money used for immediate consumption, assets are stocks of resources that can be invested to generate income, used to acquire other assets, or used for future consumption [ [4] , [5] , [6] ]. Examples of assets include financial capital (e.g., savings, bonds, or credit), human capital in the form of education, durable goods, social capital, and political capital [4,6–8].…”