Financial education affects financial knowledge and downstream behaviors

Kaiser, Tim; Lusardi, Annamaria; Menkhoff, Lukas; Urban, Carly

doi:10.1016/j.jfineco.2021.09.022

Cited by 240 publications

(143 citation statements)

References 68 publications

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“…On the other hand, a lack of financial literacy is associated with undesirable financial behaviors, such as low participation in financial markets ( Yoong, 2010 ; van Rooij et al, 2012 ), insufficient substantial equity gains, and poor financial investment decisions ( Lusardi and Mitchell, 2014 ). Given the connection between financial literacy and financial behavior and well-being, some research has focused on financial education programs with the overarching goal of increasing individuals’ financial literacy ( Lusardi, 2019 ; Kaiser et al, 2021 ). Given the enormous variety in individuals’ financial literacy, researchers have found that financial education programs customized to specific groups are more effective than others ( Lusardi and Mitchell, 2014 ; Cordero et al, 2020 ).…”

Section: Literature Reviewmentioning

confidence: 99%

Does Financial Literacy Affect Household Financial Behavior? The Role of Limited Attention

Xu¹,

Yang

Ali

et al. 2022

Front. Psychol.

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Financial literacy is essential for every individual concerned with public welfare and household portfolio choices. In this study, we investigate the impact of household financial literacy on individuals’ financial behavior using the China Household Financial Survey Data (CHFS) of 2015 and 2017. The results show that financial knowledge has significant current, long-term, and dynamic effects on financial behavior. This finding suggests that financial literacy is an important factor in shaping and improving financial behavior. Second, financial literacy can improve residents’ limited attention, and residents with high attention tend to have formal bank accounts, participate in the stock market, and engage in financial behaviors in situations such as risky financial markets. High attention also helps to improve residents’ financial behavior. This relationship suggests that financial literacy positively impacts formal bank account holding, participation in financial markets, participation in commercial insurance, participation in pension plans, and credit card holdings through limited attention channels that facilitate access to specific financial information. In addition, heterogeneity analysis showed that the impact of financial literacy on financial behavior differs significantly between urban and rural households, between men and women, and between high and low education levels. The study provides valuable insights for policy implications to enhance financial literacy, such as carrying out financial training to improve residents’ knowledge about financial aspects, which further helps to optimize household financial decision-making.

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Section: Literature Reviewmentioning

confidence: 99%

Does Financial Literacy Affect Household Financial Behavior? The Role of Limited Attention

Xu¹,

Yang

Ali

et al. 2022

Front. Psychol.

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“…Based on the results of the research and discussion above, the Tasikmalaya City MSME novice entrepreneurs expect financial education delivery techniques to use lecture and training techniques, accompanied by adequate time assistance from experienced instructors. The technique of delivering financial education is no less important than the material or modules delivered in financial education (Sabitova, 2014;Kaiser et al, 2021;Harianto & Sari, 2021). Through appropriate financial education delivery techniques, it is hoped that increasing financial literacy for entrepreneurs in general and MSME entrepreneurs in the City of Tasikmalaya, in particular, can run according to what is expected by the Financial Services Authority.…”

Section: Discussionmentioning

confidence: 99%

Financial education for MSMEs

Fauziyah

Sulastri

2022

lingcure

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This study aims to determine the types of financial education learning techniques for MSMEs in Tasikmalaya City. Financial education after owning a business is no less important than the financial education given at school or college. Based on external factors, learning techniques can affect financial education. The study used a quantitative descriptive method, and data was collected through an interview process using a closed questionnaire to 30 small business entrepreneurs in Tasikmalaya City. The results showed that the dominant learning technique chosen by the Tasikmalaya City MSME beginner entrepreneurs was through online and offline workshops accompanied by adequate time assistance.

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“…Financial literacy refers to a form of consumer expertise pertaining to the ability to understand and engage in both short-term financial management and long-term financial planning (Kaiser et al, 2021;Lusardi & Mitchell, 2014). Measurement methods typically include a wide array of objective knowledge (e.g., what are stocks vs. bonds) and skills (e.g., numeracy) deemed necessary for effective financial decision-making (Kaiser et al, 2021;Lusardi & Mitchell, 2014).…”

Section: Introductionmentioning

confidence: 99%

How materialism shapes the effectiveness of financial literacy messages: A cross‐cultural perspective

Khenfer

2022

Applied Psychology

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This cross-cultural experiment (N = 1,000) shows that messages designed to promote financial literacy are differently effective among U.S. and Arab consumers depending on the salience of materialistic thoughts at the time of exposure. Among U.S. consumers, financial literacy messages increased savings intention by heightening the importance of saving when materialistic thoughts were salient but had no impact otherwise. This is consistent with existing research which has largely focused on WEIRD countries (Western, Educated, Industrial, Rich, Democratic; Henrich, Heine, & Norenzayan, 2010). However, among Arab consumers (data collected in the United Arab Emirates), we found that financial optimism was a key construct to explain savings behaviors. Specifically, our results show that financial literacy messages lower levels of financial optimism, and thus, increase savings intention at baseline levels. When materialistic thoughts are salient, our results suggest that Arab consumers prefer spending in the presence of financial literacy messages because having materialistic thoughts heightens financial optimism when one is assured that acquiring financial knowledge and skills guarantees one's financial success.

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Financial education affects financial knowledge and downstream behaviors

Cited by 240 publications

References 68 publications

Does Financial Literacy Affect Household Financial Behavior? The Role of Limited Attention

Does Financial Literacy Affect Household Financial Behavior? The Role of Limited Attention

Financial education for MSMEs

How materialism shapes the effectiveness of financial literacy messages: A cross‐cultural perspective

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