Confidence mediates how investment knowledge influences investing self-efficacy

Forbes, James N.; Kara, S. Murat

doi:10.1016/j.joep.2010.01.012

Cited by 95 publications

(75 citation statements)

References 34 publications

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“…Relevant to this study, self‐efficacy influences a number of financially related contexts as well: investment knowledge and its influence on investing (Forbes and Kara, ), gender differences and retirement saving strategies (Dietz et al ., ), and wealth accumulation and portfolio choice (Chatterjee et al ., ). This research uses the term ‘FSE’ as this type of efficacy is relevant to the purposes of this paper.…”

Section: Literature Review and Research Hypothesesmentioning

confidence: 97%

“…Research finds that self-efficacy influences a number of constructs including depression (Maciejewski et al, 2000), stress, quality of life (Prati and Pietrantoni, 2010) and dietary knowledge and behaviour (Rimal and Moon, 2009). Relevant to this study, self-efficacy influences a number of financially related contexts as well: investment knowledge and its influence on investing (Forbes and Kara, 2010), gender differences and retirement saving strategies (Dietz et al, 2003), and wealth accumulation and portfolio choice (Chatterjee et al, 2011). This research uses the term 'FSE' as this type of efficacy is relevant to the purposes of this paper.…”

Section: Financial Self-efficacymentioning

confidence: 99%

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How gender and financial self‐efficacy influence investment risk taking

Montford

Goldsmith

2015

Int J Consumer Studies

129

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Evidence shows alarming numbers of US workers nearing retirement insufficiently save for this next life stage. Moreover, many women invest too conservatively. This finding is of particular concern as women typically live longer than men do, and thus, rely on accumulated savings for longer periods of time. This study extends work in the psychology of investing by examining the relationship between gender and investment risk and the role financial self‐efficacy (FSE) plays. Data collected from 182 US student subjects tested the hypotheses that women make less risky investments than men do and that FSE is positively related to the level of risk taken within investment portfolios. The results not only supported the hypotheses but also the analysis shows that FSE might account for the frequently observed gender difference associated with greater financial risk taking.

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Section: Literature Review and Research Hypothesesmentioning

confidence: 97%

Section: Financial Self-efficacymentioning

confidence: 99%

How gender and financial self‐efficacy influence investment risk taking

Montford

Goldsmith

2015

Int J Consumer Studies

129

View full text Add to dashboard Cite

show abstract

“…We demonstrate the econometric applicability of this financial self-efficacy instrument in a standard model of economic behaviour, employing it as an explanatory variable to assess its significance in predicting observed behavioural outcomes. While we are aware of a small number of previous studies that have assessed the explanatory power of the related concepts of 'investment self-efficacy' (Forbes & Kara 2010), 'entrepreneurial self-efficacy' (Kickul, Wilson, Marlino & Barbosa 2008) and 'economic self-efficacy' (Grabowski, Call & Mortimer 2001), there appear to be even fewer studies that have similarly tested the explanatory power of the financial self-efficacy scale:…”

Section: Introductionmentioning

confidence: 99%

The significance of financial self-efficacy in explaining women’s personal finance behaviour

Farrell

Fry

Risse

2016

Journal of Economic Psychology

301

232

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Much policy attention has been placed on enhancing individuals' financial knowledge and literacy, chiefly through financial education programs. However, managing one's personal finances takes more than financial knowledge and literacy: an individual also needs a sense of self-assuredness, or 'self-belief', in their own capabilities. This personal attribute is known within the psychology literature as 'self-efficacy'. This paper examines the significance of an individual's financial self-efficacy in explaining their personal finance behaviour, through the application of a psychometric instrument. Using a 2013 survey of Australian women, financial self-efficacy emerges as one of the strongest predictors of the type and number of financial products that a woman holds. Specifically, our analysis reveals that women with higher financial self-efficacy -that it, with greater self-assuredness in their financial management capacities -are more likely to hold investment and savings products, and less 2 likely to hold debt-related products. Even alongside other important factors -such as education, financial risk preferences, age and household income -the explanatory power of financial self-efficacy is found to be significant at the 1% critical level. Moreover, the significance of financial self-efficacy is independently identified from that of financial literacy factors, which bears important implications for the development of policies aiming to improve financial outcomes.

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“…Studies have also applied financial self-efficacy as the independent variable in a standard model of economic behaviour to evaluate its significance in predicting investigated behavioural outcomes. Some studies have assessed the explanatory power of the related concepts of 'investment self-efficacy' (Forbes & Kara, 2010), 'entrepreneurial self-efficacy' (Kickul et al, 2008), and women's personal finance behaviour (Farrell, 2015). Generally, the results indicate that financial self-efficacy could explain favourable individual economic outcomes positively.…”

Section: Introductionmentioning

confidence: 99%

Financial households’ efficacy, risk preference and saving behaviour: Lessons from lower-income households in Malaysia

Kusairi¹,

Sanusi²,

Muhamad³

et al. 2019

Economics &Amp; Sociology

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Many government policies contain recommendations how to improve financial literacy, particularly through programmes of financial education and personal finance. However, personal financial management is not solely related to knowledge and financial literacy; individual confidence level in own financial abilities and household differences need to be considered in this regard. This paper investigates household financial efficacy through application of psychometric instruments, financial literacy, risk preference and demographic characteristics towards saving decision behaviour. The sample covers 404 households in Peninsular Malaysia and utilises the logistic and probit empirical model. The results show that household's financial efficacy is essential for household's saving decision behaviour and choice of saving instrument. Financial literacy, race, education and dependence ratio and location (rural or urban) of the household also play a role in saving instruments selection. More specifically, households with higher levels of financial efficacy are more likely to use bank-based or other lower risk saving instruments as compared to nonbanking-based instruments.

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Confidence mediates how investment knowledge influences investing self-efficacy

Cited by 95 publications

References 34 publications

How gender and financial self‐efficacy influence investment risk taking

How gender and financial self‐efficacy influence investment risk taking

The significance of financial self-efficacy in explaining women’s personal finance behaviour

Financial households’ efficacy, risk preference and saving behaviour: Lessons from lower-income households in Malaysia

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