Creating Financial Capability in the Next Generation: An Introduction to the Special Issue

Sherraden, Margaret S.; Grinstein‐Weiss, Michal

doi:10.1111/joca.12067

Cited by 23 publications

(29 citation statements)

References 26 publications

(37 reference statements)

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“…Thus, our results confirmed a previous study by Kempson et al (, p. 8) who stated that “external factors that can affect how the internal capacity manifests itself into actual behaviours include financial resources, social norms and obligations, financial infrastructure, and existing financial consumer protection mechanisms”. Consistent with the results reported by Collins et al (), Lusardi et al (), Alsemgeest (), Sherraden and Grinstein‐Weiss (), and Grinstein‐Weiss et al (), we suggest that financial characteristics that are developed due to relations between financial behaviour and financial institutions are the most significant factors that shape the level of the financial capability variables of low‐income consumers in rural regions of Poland.…”

Section: Summary and Discussionsupporting

confidence: 91%

“…Given the multidimensional nature of financial capability, comprehensive measures are needed to capture all the necessary domains. In recent years, attention has shifted from the internal perspective of financial capability (both objective and subjective) towards the external view (the so-called opportunity to act) (Johnson & Sherraden, 2007;Kempson, 2009;Kempson et al, 2013;Remund, 2010;Sherraden, 2013;Sherraden & Grinstein-Weiss, 2015). These opportunities are developed predominantly by the influence of structural and institutional factors (the way financial institutions operate), which are beyond consumers' control (Baumann & Hall, 2012).…”

Section: Literature Review and Hypothesismentioning

confidence: 99%

“…Special attention should be given to low-income consumers, especially from rural regions (Murendo & Mutsonziwa, 2017). According to most studies, this group of consumers is the most disadvantaged in terms of their level of financial literacy (Betti, Dourmashkin, Rossi, & Yin, 2007;Guiso et al, 2001;Lusardi & Mitchell, 2007;Lusardi & Tufano, 2009;Sayinzoga, Bulte, & Lensink, 2016) as well as their lack of financial inclusion (Johnson & Sherraden, 2007;Lyons, Chang, & Scherpf, 2006;Sherraden & Grinstein-Weiss, 2015). Low-income may have a great impact on increased financial stress and on self-regulatory conditions, which in turn may limit or even destroy self-control (Bernheim, Ray, & Yeltekin, 2013;Camepnhaut, 2015;Mullainathan & Shafir, 2013;Xiao, Sorhaindo, & Garman, 2006).…”

Section: Literature Review and Hypothesismentioning

confidence: 99%

“…Second, by including in the financial capability index only those variables that were derived from a factor analysis and were not selected in an arbitrary manner (Moulton, Loibl, Samak, & Collins, ; Rószkiewicz, ; Shim, Serido, Bosch, & Tang, ; Taylor, ; Xiao, Chen, & Sun, ; Xiao & O’Neill, ). Third, by extending the financial capability index proposed by Xiao, Chen et al () and Xiao and O’Neill () to also include the financial inclusion variable, which has a highly important role in the personal finance management of low‐income consumers (Hira, ; Holzmann, Mulaj, & Perotti, ; Murendo & Mutsonziwa, ; Nicolini, Cude, & Chatterjee, ; Sherraden, ; Sherraden & Grinstein‐Weiss, ).…”

Section: Introductionmentioning

confidence: 99%

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Factors shaping the financial capability of low‐income consumers from rural regions of Poland

Potocki

Cierpiał-Wolan

2018

Int J Consumer Studies

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The two‐fold purpose of this study was to explore the financial capability of low‐income consumers from rural regions of Poland, using Xiao’s financial capability index, while accounting for their poverty status, demographic and financial characteristics. To test the relevant hypothesis of the study, a micro database of low‐income consumers was used. Factor, descriptive and correlation analyses were employed for preliminary examinations. One‐way ANOVA was used to examine the impact of different poverty indicators on financial capability index variables. Multiple OLS regressions were used to examine the influence of the selected factors on the level of financial capability. Six sets of linear regression models were used to explore the effects of factors associated with the financial capability variables. The findings of our study suggest that financial inclusion is an essential component of the financial capability index. The results also show that all five variables play a significant role in the financial capability index. Therefore, Xiao’s financial capability index captures a specific combination of financial literacy and financial behaviour of low‐income consumers from rural regions of Poland.

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Section: Summary and Discussionsupporting

confidence: 91%

Section: Literature Review and Hypothesismentioning

confidence: 99%

Section: Literature Review and Hypothesismentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Factors shaping the financial capability of low‐income consumers from rural regions of Poland

Potocki

Cierpiał-Wolan

2018

Int J Consumer Studies

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“…Other researchers define financial capability based on financial behavior measures (Atkinson, McKay, Collard, & Kempson, ). Financial capability is also considered to include access to financial resources for low income populations (Birkenmaier, Sherraden, & Curley, ; Sherraden & Grinstein‐Weiss, ). In this study, financial capability is defined as a consumer ability that is a skillful combination of financial knowledge and behavior, i.e., an ability to apply appropriate financial knowledge and perform desirable financial behaviors to achieve financial well‐being (Xiao & O'Neill, ; Xiao & Porto, ; Xiao, Chen, & Sun, ).…”

Section: Previous Research and Hypothesesmentioning

confidence: 99%

Propensity to plan, financial capability, and financial satisfaction

Xiao

O’Neill

2018

Int J Consumer Studies

108

113

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Propensity to plan is an indicator of financial capability that contributes to consumer financial well‐being. Previous research has shown that propensity to plan is positively related to objective financial well‐being but little research was found to examine its association with subjective financial well‐being. Using financial satisfaction to measure subjective financial well‐being, this study addressed this research gap and had three objectives: (1) to explore factors associated with propensity to plan, (2) to examine the association between propensity to plan and financial capability factors, and (3) to examine the association between propensity to plan and financial satisfaction. Using data from the 2015 US National Financial Capability Study, the results showed socioeconomic differences in propensity to plan. The results suggest consumers with more economic resources had higher scores in propensity to plan. In addition, propensity to plan was positively associated with financial capability factors, suggesting financial planning is a desirable financial behavior. Finally, propensity to plan made unique contributions to financial satisfaction after controlling for socioeconomic and other financial capability factors.

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What Factors Predict a Positive Change in a Consumer’s Financial Capability over Time? The New Evidence from Poland

Potocki

Białowąs

2022

J Fam Econ Iss

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Despite the significant attention that financial capability has received in the last 20 years, many of its aspects are poorly understood, and the term itself is ambiguously defined. Consequently, different measures of financial capability are used in empirical research creating a tendency to let the data dictate the conceptualization of the financial capability itself. This creates concerns about the reliability of the general findings for countries in Eastern Europe such as Poland. Therefore, the following study is carried out to address these limitations and contribute to the advancement of the literature on financial capability, first, by extending the mainstream of the theoretical work on financial capability with the conceptual proposition framed within Sen’s Capability Approach; second, by proposing the measurement model of financial capability; and third, by using data from the Polish household panel study, Social Diagnosis (SD), to identify factors which predict a positive change in consumer’s financial capability over time. Across these three aims, we found that higher income was a key predictor and substantially improved financial capability in Poland. We also showed the strong and positive link between financial capability and all included psychological variables. Our findings also highlighted the differential impact of demographic variables on financial capability. The findings of this study yield implications for scholars who would like to analyze financial capability in transition or developing countries, but are constrained by limited financial resources to create their own database or have no access to national financial capability studies.

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Creating Financial Capability in the Next Generation: An Introduction to the Special Issue

Cited by 23 publications

References 26 publications

Factors shaping the financial capability of low‐income consumers from rural regions of Poland

Factors shaping the financial capability of low‐income consumers from rural regions of Poland

Propensity to plan, financial capability, and financial satisfaction

What Factors Predict a Positive Change in a Consumer’s Financial Capability over Time? The New Evidence from Poland

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