Mapping financial literacy: cognition and the environment

Abstract

Recent research suggests that regions can be characterized according to their (more or less) financial literacy. One implication is that there may be regional ecologies of finance nested within national institutions and global markets. This article begins by situating behaviour in time and space, linking behaviour to the interaction between cognition and the environment. This is followed by a substantive account of the geographical scale of the “environment” working from the global to the local and in return from the local to the global. By implication, maps of financial literacy reflect the skills and expertise of resident populations, affecting how they sort amongst the relevant information to make effective decisions (which have a material effect on their long‐term welfare). Explaining how and why this is the case is one goal of the article. It is also acknowledged that representing the relationship between behaviour and the environment is conceptually and empirically challenging. Reference is made to new findings about the ways in which people “sample” the world around them, suggesting that cognition and the environment are intertwined in ways that may reinforce existing urban and regional inequalities. In conclusion, implications are drawn for the design and implementation of pension and retirement saving policies.

Sustainable financing practices through green bonds: What affects the funding size?

“…There is consensus that financial resources need to be mobilised towards low‐carbon, climate‐resilient activities to achieve a greener world (Clark, ; Hussain, ). At firm‐level, addressing environmental objectives requires mobilising a wide range of organisational resources including finance (Caldecott, ; Östlund, ).…”

Immigrants, Financial Knowledge, and Financial Behavior

“…Although greater financial knowledge might not necessarily translate into better decisions when individuals act upon their impulses, biases, external circumstances, and habits (Huston, 2010), as “most people, most of the time, are time‐space myopic” (Clark, 2013, 135) and they would discard unfamiliar information. However, there is evidence that shows targeted financial education can create new habits (Clark, 2014).…”

“…The analysis also controls for the province in which the respondents reside as financial knowledge and practices might differ across geographical locations (Clark, 2013). A high portion of immigrants reside in Ontario (which is also the largest province by population).…”

“…Among the most important implications of the findings of this paper is that there is a finance‐related knowledge gap between immigrants and born citizens. This gap could be addressed by specific forms of financial education to prepare immigrants better with respect to planning for their financial well‐being in an atmosphere that emphasizes “the widespread adoption of policy frameworks favoring individual responsibility, notwithstanding inherited traditions of collective responsibility” (Clark, 2013, 137). The paper contributes to the financial literacy literature by providing another instance of immigrants' lower level of financial knowledge as well as providing evidence on how both level of financial knowledge and status of immigration would contribute to different financial behaviors that have implications for the financial wellbeing of immigrants relative to that of born citizens.…”

“…First, individuals learn through the feedback they receive on their actions. The feedback and data one receives from the environment must be processed before learning happens (Clark, 2013): a process of updating information cognitively and forming new behaviors. Numeracy skills, which are highly correlated with the level of financial knowledge (van Rooij et al ., 2012; Jappelli and Padula, 2013; Clark, 2014), are affected by the fluency of the language in which the skills are being communicated (Kleemans et al ., 2011; Vukovic and Lesaux, 2013).…”