Prior research consistently finds a gender gap in financial knowledge where males appear to outperform females. Despite the wealth of studies attempting to explain this gap, none have considered whether the gender gap may be a product of measurement method. This study reexamines the gender gap with item response theory (IRT) which can account for guessing behavior and differential item functioning. Survey data on 184,869 individuals from 39 countries and territories is analyzed. Results show that when IRT is employed, a gender gap exists in only 54% of the sample. In contrast, when a conventional measurement approach is used, there is a gender gap in financial knowledge in 81% of the sample. These results reveal that prior measurements may underestimate women's financial knowledge and inflate the gender gap.

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Financial literacy is often measured with only three to five questions, suggesting challenges with achieving respectable levels of internal consistency reliability. Based on our review, we found financial literacy tests composed of three and five test questions yielded mean reliability estimates of 0.40 (k = 7; N = 167,075) and 0.54 (k = 8; N = 57,937), respectively: values less than minimally acceptable for even exploratory research. Based on our more comprehensive review of 52 samples and a variety of financial literacy tests (3–45 questions), researchers are recommended to measure financial literacy with a minimum of 13–15 questions. Finally, we conclude that the potential impact of financial literacy on various outcome variables has been underestimated substantially in many previous investigations, as the relatively low levels of internal consistency reliability in the financial literacy test scores attenuated the obtained effects estimated from the observed scores.

Superannuation funds heavily outsource key fund functions to service providers who play a crucial role in superannuation fund operations and affecting Australians’ retirement savings. We examine the impact of related party service provider usage and trustee‐director affiliation on investment performance. We find that for‐profit funds significantly underperform when using related party service providers. The underperformance is more severe when the board is controlled by more affiliated trustee‐directors and belongs to a vertically integrated conglomerate group. Our results raise concerns about whether recent regulatory reforms increasing trustee‐directors’ duties effectively address the conflicts of interest inherent in related party service provider arrangements.

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