Examining the Impact of Financial Literacy, Financial Self-Control, and Demographic Determinants on Individual Financial Performance and Behavior: An Insight from the Lebanese Crisis Period

Abstract

This study investigated the effects of financial literacy, financial self-control, and demographic determinants on individual financial performance and behavior during the Lebanese crisis period between 2019 and 2021. To the best of our knowledge, this may be the first study that compares the determinants of financial behavior for different generations, genders, marital statuses, and education and income levels. To do so, we conducted a comprehensive survey of 328 individuals and performed a logistic regression analysis. The empirical results show that an individual’s financial performance and behavior are positively affected by financial literacy, financial self-control, and demographic factors, in particular education and income levels. In addition, when we focused on the demographic factors, the results reveal that having good financial literacy increases the likelihood of an individual’s financial performance and behavior, in particular for Generations X and Z, males and females, single and married people, low- and high-educated people, and low- and high-income individuals. However, having good financial self-control only increases the likelihood of an individual’s financial performance and behavior at highly educated levels. The results are robust and come from various performed methodologies, and the results have important policy implications. The policies should be focused on enhancing an individual’s financial behavior and helping young adults acquire skills in self-control. Policies could also motivate local financial institutions to offer a variety of financial products and investment opportunities, targeting low-income and low-educated individuals, by providing subsidized funds with parallel mandatory financial studies.

Self-control and debt decisions relationship: evidence for different credit options

“…Besides, consumers require adequate financial empowerment to make appropriate financial decisions (Nam, 2022). To this end, as Mawad et al (2022) suggest, policies should help young adults acquire skills in self-control as well as integrating financial knowledge into school curricula. In this regard, as Boto-García et al ( 2022) also advocate, financial socialization, understood as the exposure to financial concepts while growing up, becomes essential.…”

The Effect of Self-Control on Loan Repayment Decisions of Women Market Vendors in Mbeya Municipality, Tanzania

“…Such relevance stems from the fact that self-control is vital in many facets of our life and that many of our everyday decisions, including the loan repayment decision, include exercising self-control (Lian et al, 2017). Mawad et al (2022) conducted a study in Lebanon and determined that self-control had a positive impact on an individual's financial performance and behavior, particularly at highly educated levels. Bu et al, 2022, executed a study which showed that a self-control training program, including spending tracking, budgeting, and introspection about consumption choices, effectively reduced future online borrowing and delinquency charges.…”

Does good financial behavior reduce the negative impact of financial fragility on individuals’ financial optimism? The never-ending Lebanese crisis case

“…The data used for this paper is based on the collected data by Mawad, et al [9]. The sample survey included 328 participants (157 men and 171 women).…”

“…The researcher focused on the effect of good financial behavior on the negative relationship between financial optimism and financial fragility. Few studies focus on the impact of financial literacy but we take the study a step further and consider the impact of financial behavior which may include other determinants such as financial self-control [9].…”

“…The outcomes are reliable when tested using different approaches and they have significant policy ramifications. For a higher level of financial optimism, public policies should aim to improve people's financial conduct whether by improving their financial literacy from a young age or by promoting better financial self-control [9].…”