Quantitative Literacy at Michigan State University, 2: Connection to Financial Literacy

Abstract

The lack of capability of making financial decisions has been recently described for the adult United States population. A concerted effort to increase awareness of this crisis, to improve education in quantitative and financial literacy, and to simplify financial decision-making processes is critical to the solution. This paper describes a study that was undertaken to explore the relationship between quantitative literacy and financial literacy for entering college freshmen. In summer 2010, incoming freshmen to Michigan State University were assessed. Well-tested financial literacy items and validated quantitative literacy assessment instruments were administered to 531 subjects. Logistic regression models were used to assess the relationship between level of financial literacy and independent variables including quantitative literacy score, ACT mathematics score, and demographic variables including gender. The study establishes a strong positive association between quantitative literacy and financial literacy on top of the effects of the other independent variables. Adding one percent to the performance on a quantitative literacy assessment changes the odds for being at the highest level of financial literacy by a factor estimated to be 1.05. Gender is found to have a large, statistically significant effect as well with being female changing the odds by a factor estimated to be 0.49.

Financial Literacy and the Success of Small Businesses: An Observation from a Small Business Development Center

“…The general pattern of inadequacies documented in this journal by Lusardi (2012) and Gilliland et al (2011) with respect to debt and money management among consumers is apparently paralleled by comparable deficiencies for entrepreneurs. In our case study, 50% of business owners (7/14 businesses) did not regularly review financial statements, and 86% (6/7) of those businesses were experiencing financial difficulties; conversely, 50% (7/14) of the businesses in the study were experiencing financial difficulties, and for 86% (6/7) of them, the business owner did not regularly review the financial statements.…”

“…4;Crauder et al 2012, Chap. 4), papers in this journal (e.g., Gilliland et al 2011;Lusardi 2012;Nye and Hillyard 2013) A measure of the degree to which one understands key financial concepts and possesses the ability and confidence to manage personal finances through appropriate, short-term decision-making and sound, long-range financial planning, while mindful of life events and changing economic conditions. This operational definition, according to Remund (2010), encompasses the four most common areas: budgeting, savings, borrowing, and investing.…”

Personal Financial Behavior: The Influence of Quantitative Literacy and Material Values

“…Considerable previous research (Huston 2010;Lusardi and Mitchell 2007;Gilliland et al 2011) suggests that quantitative literacy encourages informed financial choices. Consumers may make decisions that downplay long-term outcomes, because they do not understand financing alternatives or they have difficulty with basic quantitative tools.…”

“…Gilliland et al (2011) surveyed college freshman to assess the relationship between financial literacy, quantitative literacy, ACT mathematics scores, and demographic variables. They found a large positive relationship between quantitative literacy and financial literacy.…”

Quantitative Map Literacy: A Cross between Map Literacy and Quantitative Literacy

“…We embarked on our exploration of quantitative map literacy (QML) because we believe that it has potential to stand alongside financial literacy (e.g., Gilliland et al 2011;Lusardi 2012;de Bassa Scheresberg 2013;Lusardi and Wallace 2013;Nye and Hillyard 2013;Dahmen and Rodriguez 2014) and health numeracy (e.g., Baker et al 1999;Lipkus et al 2001;Vacher and Chavez 2009;Ancker and Begg 2017;Taylor andByrne-Davis 2016, 2017) as an intrinsically interesting learning area for students who are in an environment supportive of QL across the curriculum (e.g., Steele and Kiliç -Bahi 2008;Forgasz et al 2017). Our first step has been to try to get a handle on the wide diversity of maps that students may encounter.…”