Financial literacy and financial behavior: Evidence from the emerging Asian middle class

Grohmann, Antonia

doi:10.1016/j.pacfin.2018.01.007

Cited by 181 publications

(115 citation statements)

References 52 publications

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“…This was true, for example, in research in Bangkok (Grohmann, 2018), the United Arab Emirates (Suri & Purohit, 2017), Malaysia (Ali, Rahman, & Bakar, 2015) and Brunei (Salleh, 2015) (the latter two used only the inflation question). Knowledge rates were higher than those in the United States and Europe for the inflation question in Korea, where 92% of the native-born respondents answered correctly (Kim, Choi, & Lee, 2017).…”

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confidence: 97%

Financial knowledge among Iranian investors

Cude

Chatterjee

Tavosi

2019

Int J Consumer Studies

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This research is the first to describe financial knowledge in the Islamic Republic of Iran. Data were collected from a convenience sample of investors in the Tehran Stock Exchange. The data were used to examine objective and subjective knowledge as well as overconfidence in one's financial knowledge. The results indicated that compared with other populations, Iranians did not perform well on either basic or advanced financial knowledge questions, especially when the questions dealt with interest rates. This is likely related to the Islamic law ban on usury‐based investing. Regression analysis indicated that demographic charactristics related to basic financial knowledge were income, labour force status and being a student. Demographic characteristics related to advanced financial knowledge were education, labour force status and age. Higher income and education reduced the odds of being overconfident about one's financial knowledge, while being a student and male increased the odds. The article concludes with recommendations about future research as well as building a national financial education strategy.

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confidence: 97%

Financial knowledge among Iranian investors

Cude

Chatterjee

Tavosi

2019

Int J Consumer Studies

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“…The effect of financial literacy on economic preferences can serve as another example. According to previous studies (e.g., Gathergood, 2012;Lusardi et al, 2017;Grohmann, 2018), it could be expected that financial literacy would determine economic preferences. Counterintuitively, a meta-analysis by Fernandes et al (2014) suggests that an increase in financial literacy explains less than 1% of the variance in economic decision-making.…”

Section: Discussionmentioning

confidence: 99%

Consequences of Poverty on Economic Decision-Making: Assessing the Verisimilitude of the Cognitive Mechanism

Adamkovič

2020

Front. Psychol.

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The paper aims to assess the verisimilitude of the hypothesized model of poverty perpetuation which links socioeconomic situation and economic preferences via cognitive load, executive functions, and intuitive/deliberative decision-making styles. In order to test the model against the data, three studies (exploratory, confirmatory, and replication) were conducted with a total sample size of 1182 participants. The results showed that neither the proposed model as a whole found the required support in the data nor the consequent, theoretically justifiable, respecifications improved its fit so that it could be deemed acceptable. Simultaneously, the dyadic relationships between the variables were mainly found to be weak. The sensitivity analysis revealed that the majority of the observed estimates varied substantively depending on the arbitrary analytic decisions of the researcher. In summary, the hypothesized cognitive mechanism does not explain what economic decision-making depends on nor why people fall into poverty traps. The paper discusses several plausible sources of the negative findings and possible directions for future research are suggested.

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“…The effect of financial literacy on economic preferences can serve as another example. Both according to studies (e.g., Gathergood, 2012;Grohmann, 2018;Lusardi, Michaud, & Mitchell, 2017) and also naturally, one could expect that financial literacy determines economic preferences. Counterintuitively, a meta-analysis by Fernandes, Lynch, and Netemeyer (2014) suggests that an increase in financial literacy explains less than 1% of the variance in economic decision-making.…”

Section: Discussionmentioning

confidence: 99%

Consequences of poverty on economic decision-making: Assessing the verisimilitude of the cognitive mechanism

Adamkovič¹

2019

Preprint

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The paper aims to assess the verisimilitude of the hypothesized model of poverty perpetuation linking socioeconomic situation and economic preferences via cognitive load, executive functions, and intuitive/deliberative decision-making style. The proposed model as a whole has not found required support in data, and simultaneously, the dyadic relationships between the variables have been mainly weak. Sensitivity analysis has revealed that the majority of the observed estimates varies substantively depending on the arbitrary analytic decisions of the researcher. The findings could be primarily attributed to (1) the possibility that the nature of economic preferences resembles stable personality traits and hence the preferences are only weakly determined by cognitive dispositions or patterns of emotional/cognitive responses in a long run; (2) the high social equality and relatively low poverty rate in Slovakia, which currently allows the majority of the inhabitants to afford elementary goods and meet the basic needs, regardless of their economic situation; (3) the fact that the current state of knowledge in behavioral sciences is burdened by multiple problems (e.g., lack of good theory, complicated issue of causality, prevalence of questionable research practices, or publication bias), resulting into poor replicability and low credibility of the knowledge, implies that the theories upon which the model was built might not necessarily be true. The hypothesized cognitive mechanism does not allow to explain what economic decision-making depends on, neither why do people fall into poverty traps.

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Financial literacy and financial behavior: Evidence from the emerging Asian middle class

Cited by 181 publications

References 52 publications

Financial knowledge among Iranian investors

Financial knowledge among Iranian investors

Consequences of Poverty on Economic Decision-Making: Assessing the Verisimilitude of the Cognitive Mechanism

Consequences of poverty on economic decision-making: Assessing the verisimilitude of the cognitive mechanism

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