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Tullio Jappelli - One of the best experts on this subject based on the ideXlab platform.

  • Investment in Financial Literacy and saving decisions
    Journal of Banking & Finance, 2013
    Co-Authors: Tullio Jappelli, Mario Padula
    Abstract:

    Abstract We present an intertemporal consumption model of investment in Financial Literacy. Consumers benefit from such investment because Financial Literacy allows them to increase the returns on wealth. Since Literacy depreciates over time and has a cost in terms of current consumption, the model delivers an optimal investment in Literacy. Furthermore, Literacy and wealth are determined jointly, and are positively correlated over the life-cycle. The model drives our empirical approach to the analysis of the effect of Financial Literacy on wealth and saving and indicates that the stock of Financial Literacy early in life is a valid instrument in the regression of wealth on Financial Literacy. Using microeconomic and aggregate data, we find strong support for the model’s predictions.

  • investment in Financial Literacy and saving decisions
    Social Science Research Network, 2011
    Co-Authors: Tullio Jappelli, Mario Padula
    Abstract:

    We present an intertemporal consumption model of consumer investment in Financial Literacy. Consumers benefit from such investment because their stock of Financial Literacy allows them to increase the returns on their wealth. Since Literacy depreciates over time and has a cost in terms of current consumption, the model determines an optimal investment in Literacy. The model shows that Financial Literacy and wealth are determined jointly, and are positively correlated over the life cycle. Empirically, the model leads to an instrumental variables approach, in which the initial stock of Financial Literacy (as measured by math performance in school) is used as an instrument for the current stock of Literacy. Using microeconomic and aggregate data, we find a strong effect of Financial Literacy on wealth accumulation and national saving, and also show that ordinary least squares estimates understate the impact of Financial Literacy on saving.

  • investment in Financial Literacy and saving decisions
    Research Papers in Economics, 2011
    Co-Authors: Tullio Jappelli, Mario Padula
    Abstract:

    We present an intertemporal consumption model of consumer investment in Financial Literacy. Consumers benefit from such investment because their stock of Financial Literacy allows them to increase the returns on their wealth. Since Literacy depreciates over time and has a cost in terms of current consumption, the model determines an optimal investment in Literacy. The model shows that Financial Literacy and wealth are determined jointly, and are positively correlated over the life cycle. Empirically, the model leads to an instrumental variables approach, in which the initial stock of Financial Literacy (as measured by math performance in school) is used as an instrument for the current stock of Literacy. Using microeconomic and aggregate data, we find a strong effect of Financial Literacy on wealth accumulation and national saving, and also show that ordinary least squares estimates underestate the impact of Financial Literacy on saving.

  • Financial Literacy and portfolio diversification
    2008
    Co-Authors: Luigi Guiso, Tullio Jappelli
    Abstract:

    In this paper we focus on poor Financial Literacy as one potential factor explaining lack of portfolio diversification. We use the 2007 Unicredit Customers’ Survey, which has indicators of portfolio choice, Financial Literacy and many demographic characteristics of investors. We first propose test-based indicators of Financial Literacy and document the extent of portfolio under-diversification. We find that measures of Financial Literacy are strongly correlated with the degree of portfolio diversification. We also compare the test-based degree of Financial Literacy with investors’ self-assessment of their Financial knowledge, and find only a weak relation between the two measures, an issue that has gained importance after the EU Markets in Financial Instruments Directive (MIFID) has required Financial institutions to rate investors’ Financial sophistication through questionnaires.

  • Financial Literacy and portfolio diversification
    2008
    Co-Authors: Luigi Guiso, Tullio Jappelli
    Abstract:

    In this paper we focus on poor Financial Literacy as one potential factor explaining lack of portfolio diversification. We use the 2007 Unicredit Customers’ Survey, which has indicators of portfolio choice, Financial Literacy and many demographic characteristics of investors. We first propose test-based indicators of Financial Literacy and document the extent of portfolio under-diversification. We find that measures of Financial Literacy are strongly correlated with the degree of portfolio diversification. We also compare the test-based degree of Financial Literacy with investors’ self-assessment of their Financial knowledge, and find only a weak relation between the two measures, an issue that has gained importance after the EU Markets in Financial Instruments Directive (MIFID) has required Financial institutions to rate investors’ Financial sophistication through questionnaires.

David Bravo - One of the best experts on this subject based on the ideXlab platform.

  • how Financial Literacy affects household wealth accumulation
    The American Economic Review, 2012
    Co-Authors: Jere R. Behrman, Olivia S. Mitchell, Cindy K. Soo, David Bravo
    Abstract:

    This study isolates the causal effects of Financial Literacy and schooling on wealth accumulation using a new household dataset and an instrumental variables (IV) approach. Financial Literacy and schooling attainment are both strongly positively associated with wealth outcomes in linear regression models, whereas the IV estimates reveal even more potent effects of Financial Literacy. They also indicate that the schooling effect only becomes positive when interacted with Financial Literacy. Estimated impacts are substantial enough to imply that investments in Financial Literacy could have large wealth payoffs.

  • Financial Literacy, Schooling, and Wealth Accumulation
    2010
    Co-Authors: Jere R. Behrman, Olivia S. Mitchell, Cindy K. Soo, David Bravo
    Abstract:

    Financial Literacy and schooling attainment have been linked to household wealth accumulation. Yet prior findings may be biased due to noisy measures of Financial Literacy and schooling, as well as unobserved factors such as ability, intelligence, and motivation that could enhance Financial Literacy and schooling but also directly affect wealth accumulation. Here we use a new household dataset and an instrumental variables approach to isolate the causal effects of Financial Literacy and schooling on wealth accumulation. While Financial Literacy and schooling attainment are both strongly positively associated with wealth outcomes in linear regression models, our approach reveals even stronger and larger effects of Financial Literacy on wealth. It also indicates no significant positive effects of schooling attainment conditional on Financial Literacy in a linear specification, but positive effects when interacted with Financial Literacy. Estimated impacts are substantial enough to suggest that investments in Financial Literacy could have large positive payoffs.

  • Financial Literacy schooling and wealth accumulation
    National Bureau of Economic Research, 2010
    Co-Authors: Jere R. Behrman, Olivia S. Mitchell, Cindy K. Soo, David Bravo
    Abstract:

    Financial Literacy and schooling attainment have been linked to household wealth accumulation. Yet prior findings may be biased due to noisy measures of Financial Literacy and schooling, as well as unobserved factors such as ability, intelligence, and motivation that could enhance Financial Literacy and schooling but also directly affect wealth accumulation. We use a new household dataset and an instrumental variables approach to isolate the causal effects of Financial Literacy and schooling on wealth accumulation. While Financial Literacy and schooling attainment are both strongly positively associated with wealth outcomes in linear regression models, our approach reveals even stronger and larger effects of Financial Literacy on wealth. Estimated impacts are substantial enough to suggest that investments in Financial Literacy could have large positive effects on household wealth accumulation.

Olivia S. Mitchell - One of the best experts on this subject based on the ideXlab platform.

  • how Financial Literacy affects household wealth accumulation
    The American Economic Review, 2012
    Co-Authors: Jere R. Behrman, Olivia S. Mitchell, Cindy K. Soo, David Bravo
    Abstract:

    This study isolates the causal effects of Financial Literacy and schooling on wealth accumulation using a new household dataset and an instrumental variables (IV) approach. Financial Literacy and schooling attainment are both strongly positively associated with wealth outcomes in linear regression models, whereas the IV estimates reveal even more potent effects of Financial Literacy. They also indicate that the schooling effect only becomes positive when interacted with Financial Literacy. Estimated impacts are substantial enough to imply that investments in Financial Literacy could have large wealth payoffs.

  • Financial Literacy implications for retirement security and the Financial marketplace
    2012
    Co-Authors: Olivia S. Mitchell, Annamaria Lusardi
    Abstract:

    1. The Outlook for Financial Literacy PART I. Financial Literacy AND Financial DECISION MAKING 2. Financial Literacy and Planning: Implications for Retirement Wellbeing 3. Pension Plan Distributions: The Importance of Financial Literacy 4. Financial Literacy and 401(k) Loans 5. Financial IlLiteracy and Stock Market Participation: Evidence from the RAND American Life Panel PART II. EVALUATING Financial Literacy INTERVENTIONS 6. Fees, Framing, and Financial Literacy in the Choice of Pension Manager 7. Investor Knowledge and Experience with Investment Advisers and Broker-Dealers 8. Pecuniary Mistakes? Payday Borrowing by Credit Union Members 9. Annuities, Financial Literacy and Information Overload PART III. SHAPING THE Financial Literacy ENVIRONMENT 10. Financial Counseling, Financial Literacy, and Household Decision Making 11. Time Perception and Retirement Saving: Lessons from Behavioral Decision Research 12. Making Savers Winners: An Overview of Prize-Linked Saving Products 13. How to Improve Financial Literacy: Some Successful Strategies 14. Bringing Financial Literacy and Education to Low and Middle Income Countries 15. Improving Financial Literacy: The Role of Nonprofit Providers

  • Financial Literacy among the young
    Journal of Consumer Affairs, 2010
    Co-Authors: Annamaria Lusardi, Olivia S. Mitchell, Vilsa Curto
    Abstract:

    We examined Financial Literacy among the young using the most recent wave of the 1997 National Longitudinal Survey of Youth. We showed that Financial Literacy is low; fewer than one-third of young adults possess basic knowledge of interest rates, inflation and risk diversification. Financial Literacy was strongly related to sociodemographic characteristics and family Financial sophistication. Specifically, a college-educated male whose parents had stocks and retirement savings was about 45 percentage points more likely to know about risk diversification than a female with less than a high school education whose parents were not wealthy.

  • Financial Literacy, Schooling, and Wealth Accumulation
    2010
    Co-Authors: Jere R. Behrman, Olivia S. Mitchell, Cindy K. Soo, David Bravo
    Abstract:

    Financial Literacy and schooling attainment have been linked to household wealth accumulation. Yet prior findings may be biased due to noisy measures of Financial Literacy and schooling, as well as unobserved factors such as ability, intelligence, and motivation that could enhance Financial Literacy and schooling but also directly affect wealth accumulation. Here we use a new household dataset and an instrumental variables approach to isolate the causal effects of Financial Literacy and schooling on wealth accumulation. While Financial Literacy and schooling attainment are both strongly positively associated with wealth outcomes in linear regression models, our approach reveals even stronger and larger effects of Financial Literacy on wealth. It also indicates no significant positive effects of schooling attainment conditional on Financial Literacy in a linear specification, but positive effects when interacted with Financial Literacy. Estimated impacts are substantial enough to suggest that investments in Financial Literacy could have large positive payoffs.

  • Financial Literacy schooling and wealth accumulation
    National Bureau of Economic Research, 2010
    Co-Authors: Jere R. Behrman, Olivia S. Mitchell, Cindy K. Soo, David Bravo
    Abstract:

    Financial Literacy and schooling attainment have been linked to household wealth accumulation. Yet prior findings may be biased due to noisy measures of Financial Literacy and schooling, as well as unobserved factors such as ability, intelligence, and motivation that could enhance Financial Literacy and schooling but also directly affect wealth accumulation. We use a new household dataset and an instrumental variables approach to isolate the causal effects of Financial Literacy and schooling on wealth accumulation. While Financial Literacy and schooling attainment are both strongly positively associated with wealth outcomes in linear regression models, our approach reveals even stronger and larger effects of Financial Literacy on wealth. Estimated impacts are substantial enough to suggest that investments in Financial Literacy could have large positive effects on household wealth accumulation.

Jere R. Behrman - One of the best experts on this subject based on the ideXlab platform.

  • how Financial Literacy affects household wealth accumulation
    The American Economic Review, 2012
    Co-Authors: Jere R. Behrman, Olivia S. Mitchell, Cindy K. Soo, David Bravo
    Abstract:

    This study isolates the causal effects of Financial Literacy and schooling on wealth accumulation using a new household dataset and an instrumental variables (IV) approach. Financial Literacy and schooling attainment are both strongly positively associated with wealth outcomes in linear regression models, whereas the IV estimates reveal even more potent effects of Financial Literacy. They also indicate that the schooling effect only becomes positive when interacted with Financial Literacy. Estimated impacts are substantial enough to imply that investments in Financial Literacy could have large wealth payoffs.

  • Financial Literacy, Schooling, and Wealth Accumulation
    2010
    Co-Authors: Jere R. Behrman, Olivia S. Mitchell, Cindy K. Soo, David Bravo
    Abstract:

    Financial Literacy and schooling attainment have been linked to household wealth accumulation. Yet prior findings may be biased due to noisy measures of Financial Literacy and schooling, as well as unobserved factors such as ability, intelligence, and motivation that could enhance Financial Literacy and schooling but also directly affect wealth accumulation. Here we use a new household dataset and an instrumental variables approach to isolate the causal effects of Financial Literacy and schooling on wealth accumulation. While Financial Literacy and schooling attainment are both strongly positively associated with wealth outcomes in linear regression models, our approach reveals even stronger and larger effects of Financial Literacy on wealth. It also indicates no significant positive effects of schooling attainment conditional on Financial Literacy in a linear specification, but positive effects when interacted with Financial Literacy. Estimated impacts are substantial enough to suggest that investments in Financial Literacy could have large positive payoffs.

  • Financial Literacy schooling and wealth accumulation
    National Bureau of Economic Research, 2010
    Co-Authors: Jere R. Behrman, Olivia S. Mitchell, Cindy K. Soo, David Bravo
    Abstract:

    Financial Literacy and schooling attainment have been linked to household wealth accumulation. Yet prior findings may be biased due to noisy measures of Financial Literacy and schooling, as well as unobserved factors such as ability, intelligence, and motivation that could enhance Financial Literacy and schooling but also directly affect wealth accumulation. We use a new household dataset and an instrumental variables approach to isolate the causal effects of Financial Literacy and schooling on wealth accumulation. While Financial Literacy and schooling attainment are both strongly positively associated with wealth outcomes in linear regression models, our approach reveals even stronger and larger effects of Financial Literacy on wealth. Estimated impacts are substantial enough to suggest that investments in Financial Literacy could have large positive effects on household wealth accumulation.

Simon Grima - One of the best experts on this subject based on the ideXlab platform.

  • Financial Literacy: The Case of Poland
    Sustainability, 2020
    Co-Authors: Beata Swiecka, Eser Yeşildağ, Ercan Özen, Simon Grima
    Abstract:

    Financial Literacy is a path to sustainability and has an important role in ensuring the Financial sustainability of individuals, families, enterprises and national economies. The level of these economic indicators such as debt, payment discipline, savings and Financial management all translate into prosperity or insolvency and bankruptcy and result partially from Financial Literacy. The higher the level of Financial Literacy, especially of young people, the more favourable the level of economic indicators, which translates into the economy and sustainable development. With this study we aim to determine the level of Financial Literacy of high school students in Poland and to determine whether Financial Literacy changes according to gender. The most important element that distinguishes our study from the others is that or study was carried out with a large sample of high school students with an average age of 15–16 years. In addition, the effect of gender on Financial Literacy at an early age was investigated, also comparing the wider themes to the so-called narrow themes. The results of the research demonstrated a good and partially very good, level of Financial knowledge of the young people in Poland. 45.3% obtained an average level score and 43.8% achieved a high-level score in Financial knowledge. This result shows that they can be rational in their Financial decision making. However although, it is understood that gender makes a difference on Financial behaviour and use of Financial instruments, gender does not make any difference on the level of Financial knowledge. Moreover, the Financial Literacy level of males is found to be higher than females.

  • Financial Literacy: The Case of Poland
    2019
    Co-Authors: Beata Swiecka, Eser Yeşildağ, Ercan Özen, Simon Grima
    Abstract:

    Financial Literacy is a path to sustainability and has an important role in ensuring the Financial sustainability of individuals, families, enterprises and national economies. The level of these economic indicators such as debt, payment discipline, savings and Financial management all translate into prosperity or insolvency and bankruptcy and result partially from Financial Literacy. The higher the level of Financial Literacy, especially of young people, the more favorable the level of economic indicators, which translates into the economy and sustainable development. However, despite many years of research, there is still a lack of a uniform and coherent definition of Financial Literacy, as well as methods for measuring it. This study offers a small step forward, presenting the authors’ own view of the concept of Financial Literacy, the conceptualizations of Financial Literacy and methods used for investigating. Moreover, they present the results of a survey conducted on the Financial behaviour, Financial attitudes, and Financial knowledge of the Polish youth and compare this to a PISA study on 15-year-old students. Results demonstrate a good, and partially very good, level of Financial Literacy among young Poles, showing that they are rational in their Financial decision making.