Financial Advice Seeking, Financial Knowledge and Overconfidence. Evidence from the Italian Market

Gentile, Mattia; Linciano, Nadia; Soccorso, Paola

doi:10.2139/ssrn.2802589

Cited by 18 publications

(23 citation statements)

References 61 publications

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“…For instance, Ben-David, Graham, and Harvey (2007) found that overconfident CFOs use more debt, particularly long-term debt. Finally, previous research also evidenced that the more overconfident individuals, the less likely decision to seek for professional financial advice (Gentile, Linciano, and Soccorso 2016;Kramer 2014). Such characteristics may result in the illusion of control that can jeopardize economic stability of households such persons are financially responsible for.…”

Section: Segmentation Of Respondentssupporting

confidence: 82%

“…However, as Van Rooij, Lusardi, and Alessie (2011) as well as Collins (2012) showed these two variables more often act like complements rather than substitutes, that is, more financially literate people more often seek for and use professional financial advice compared to less literate ones. Such a pattern was confirmed by later researchers (e.g., Debbich 2015;Gentile, Linciano, and Soccorso 2016;Porto and Xiao 2016;Robb, Babiarz, and Woodyard 2012). Collins (2012) also observed that, because of its peculiar properties, debt advice is an exception to the pattern.…”

Section: Attitudes Toward Debt Literacy and Educationmentioning

confidence: 99%

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Debt Literacy and Debt Literacy Self‐Assessment: The Case of Poland

Cwynar¹,

Cwynar²,

Wais³

2018

Journal of Consumer Affairs

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It is well documented that financial literacy is at best moderate around the world and that the cost of ignorance in this field may be high on both microeconomic and macroeconomic levels. We surveyed a representative sample of Poles to measure their debt literacy—a little‐studied aspect of financial literacy—and therefore obtain insight into the factors predicting it. Our study evidenced low levels of debt literacy and its overestimation by respondents in their self‐reports. We also confirmed some of the patterns found in former studies, including the gender gap and a positive relationship between the level of educational attainment and debt literacy. Finally, our examination provides compelling outcomes with regard to the segmentation of the sample on the basis of objective and subjective debt literacy scores. They show large heterogeneity of debt literacy and thus confirm the need for far‐reaching customization of debt‐oriented education.

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Section: Segmentation Of Respondentssupporting

confidence: 82%

Section: Attitudes Toward Debt Literacy and Educationmentioning

confidence: 99%

Debt Literacy and Debt Literacy Self‐Assessment: The Case of Poland

Cwynar¹,

Cwynar²,

Wais³

2018

Journal of Consumer Affairs

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“…We cannot rule out that both the vectors and the strengths of key relationships (e.g. between financial literacy and demand for financial advice) are sensitive to designs of adopted measures of literacyan issue which was addressed by some authors (Gentile et al, 2016). Further, despite the distribution of traits in our sample, which resembles the distribution in representative samples, Facebook users might constitute a social group that is different from society as a whole in terms of the relations among variables studied in this article.…”

Section: Discussionmentioning

confidence: 97%

“…This is important, because the existing literature approaches the financial advice problem in several distinct ways. First, there are studies probing factors underlying the decision to demand a professional adviceas we did in our study (see also, for instance, Allgood & Walstad, 2016;Gentile, Linciano, & Soccorso, 2016;Robb et al, 2012). Second, some researchers examine respondents who received advice, while others go even further in their studies and check whether the respondents followed the advice or improved their financial behaviour in response to advice (Bucher-Koenen & Bucher, 2015;Hung & Yoong, 2010).…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

“…Respondents were also asked to self-report their trust in lending institutions (marked as TRUST) on a 5-point Likert scale (where 1 meant 'Decidedly disagree' and 5 meant 'Decidedly agree') when presented with the following statement: I have no confidence in lending institutions. Formerly, this variable was tested in financial advice-seeking studies by Calcagno and Monticone (2015), Porto and Xiao (2016) and Gentile et al (2016).…”

Section: Control Variablesmentioning

confidence: 99%

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Debt literacy and debt advice-seeking behaviour among Facebook users: the role of social networks

Cwynar

Kowerski

et al. 2019

Baltic Journal of Economics

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Professional advice can be perceived as a means to tackle shortcomings in the objectively measured financial literacy of consumers. However, most studies suggest that less financially literate individuals are less likely to seek experts' financial advice. At the same time, it has been shown that financial confidenceor subjectively perceived financial literacyis positively correlated with the propensity to request such professional advice. This study examines these puzzling effects in a sample of 1,055 Facebook users in Poland, and within an analytical framework that allows control of the potential endogeneity of financial literacy to professional advice. A series of regressions applied to the results of our survey showed that objective debt literacya little-studied aspect of financial literacywas insignificant in explaining adviceseeking behaviour, although the decisions to ask for advice were positively dependent on subjective debt literacy. Such outcomes prove that subjective financial literacy should be treated as a separate construct which can predict financial behaviour above and beyond predictions based on objective financial literacy. Our findings also suggest a positive role for social networks in inducing desired financial actions. We found that respondents having access to greater resources embedded in their social networks are more inclined to seek professional debt advice.

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A methodological overview to defining and measuring “digital” financial literacy

Lyons

Kass-Hanna

2021

Fin Plan Rev

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Researchers and financial practitioners alike recognize the importance of defining and measuring financial literacy (FL) to better understand its relationship to financial behavior and decision-making. Despite many efforts, there is still no widely accepted definition or methodological approach for measuring FL. The rapid expansion of digital financial services (DFS), which promises to enhance financial inclusion and improve personal financial management, has brought to light a new challenge: linking FL to digital literacy (DL) and assessing their dual effect on financial outcomes. Recent research has even proposed a framework to operationalize the emerging concept of digital financial literacy (DFL), as traditional FL definitions and metrics have become insufficient to capture the specificities of financial services within a digital context. This survey article discusses empirical research techniques being used to assess FL, DL, and most recently DFL. It highlights the characteristics and limitations of these approaches and suggests ways to address some of the challenges related to the construction, testing, weighting, and standardization of multidimensional measures, as well as methodological issues related to modeling and estimation. The article is a helpful guide to researchers and practitioners interested in FL in general and in the emerging concept of "digital" financial literacy.

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Financial Advice Seeking, Financial Knowledge and Overconfidence. Evidence from the Italian Market

Cited by 18 publications

References 61 publications

Debt Literacy and Debt Literacy Self‐Assessment: The Case of Poland

Debt Literacy and Debt Literacy Self‐Assessment: The Case of Poland

Debt literacy and debt advice-seeking behaviour among Facebook users: the role of social networks

A methodological overview to defining and measuring “digital” financial literacy

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