Financial literacy is better than income to predict happiness.

Xiao, He; Xin, Ziqiang

doi:10.1037/npe0000161

Cited by 8 publications

(6 citation statements)

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“…Q. Xin, Zhang, et al, 2018). Moreover, with respect to the predictive validity of these two factors, a recent study found that both the HSI and HEI played independent and vital roles in enhancing happiness (Xiao & Xin, 2022), suggesting that these two factors are distinct but complementary. Therefore, we calculated the HEI using the average score of the three tests’ sum totals (financial knowledge, financial capacity, and financial management values).…”

Section: Methodsmentioning

confidence: 99%

“…Financial literacy has been shown to boost happiness and economic confidence, inhibit household overindebtedness, increase retirement planning, and enhance wealth accumulation (Behrman et al, 2012; Bucciol et al, 2021; Sachse et al, 2012; van Rooij et al, 2011; Xiao & Xin, 2022). Given the economic importance, a burgeoning body of the literature has explored how financial literacy is subject to institutional factors, such as poverty, unemployment, and human capital on the regional level (Cucinelli et al, 2019; Cupák et al, 2021; Jappelli, 2010; Lachance, 2014; Li et al, 2022).…”

Section: Financial Literacymentioning

confidence: 99%

“…For example, the previous literature has shown that people who prioritize values and life goals beyond money and wealth were less likely to be indebted or display compulsive spending (Garðarsdóttir & Dittmar, 2012) and that financial ethics impacted subsequent investment decisions (Hofmann et al, 2008). Furthermore, a recent study found that the enhancement effects of financial ethics and wealth values on personal happiness are as strong as the positive impacts of financial knowledge and financial capacity (Xiao & Xin, 2022). These findings point to the necessity of integrating financial values (wealth values and financial ethics) into financial literacy…”

Section: Financial Literacymentioning

confidence: 99%

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Provincial marketization and individual financial literacy in China.

Xin¹,

Yang²

2023

Journal of Neuroscience, Psychology, and Economics

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In the past decades, China has experienced a process of marketization, but the levels of marketization in each province are imbalanced. The present research examines how provincial-level marketization predicts individual-level financial literacy in China by investigating a nationally representative sample with a set of standardized financial literacy tests. The results showed a positive association with a diminishing return between marketization and the Homo economicus index of financial literacy, including financial knowledge, financial capacity, and financial management values. Furthermore, there was a U-shaped relationship between marketization and the Homo sociologicus index of financial literacy, including wealth values and financial ethics. The findings not only contribute to understanding the nonmonotonic roles of marketization on different facets of financial literacy but also point to an institutional avenue for policymakers and practitioners interested in improving individual financial literacy.

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Section: Methodsmentioning

confidence: 99%

Section: Financial Literacymentioning

confidence: 99%

Section: Financial Literacymentioning

confidence: 99%

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Provincial marketization and individual financial literacy in China.

Xin¹,

Yang²

2023

Journal of Neuroscience, Psychology, and Economics

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“…Extensive research has established that priming individuals to contemplate money or engaging in market activities leads to more unethical and individualistic behaviours and less prosocial behaviours (Falk & Szech, 2013; Vohs et al, 2006; Zhang & Xin, 2019). By considering evidence of the two conflicting views, we have found that there is more evidence suggesting the negative effects of the market mindset (Xin et al, 2022; Xin & Yang, 2023). Also, the majority of studies demonstrating the positive role of the market mindset in prosocial behaviour are predominantly correlational rather than causal in nature, thereby prohibiting the elimination of the influence of other variables (Xin, 2019).…”

Section: Introductionmentioning

confidence: 95%

The market mindset erodes social mindfulness

Xiao,

Xin

2023

Asian J of Social Psycho

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Previous studies have mainly explored the impacts of social mindfulness on social behaviours (e.g., cooperation), little is known about crucial macro social environment factors that affect social mindfulness, like the market economy. With the development of the market economy, people typically acquire the self‐centred and rational market mindset which may suppress social mindfulness. Therefore, the current study aimed to examine the causal relationship between the market mindset and social mindfulness, as well as the psychological mechanism behind the effect. In Study 1, participants whose market mindset was activated by recalling market experiences showed lower social mindfulness than those whose non‐market mindset was activated by recalling other experiences. Studies 2 and 3 explored the mediation of perspective taking and state empathy behind the detrimental effect. It was found that the relationship between the market mindset and social mindfulness was mediated by perspective taking rather than by state empathy. Together, the present three studies expand the existing literature on the relationship between the market mindset and social mindfulness and remind policymakers to pay attention to the adverse effects of the market mindset on social mindfulness.

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“…Even so, many people are often reluctant to engage in financial activities such as stock and fund investments, credit spending, and debt management. This phenomenon has been explained by many economists and psychologists, who contend that people's subjective and objective financial knowledge, their perception regarding the complexity of financial decisions, and their unique personality traits are significant factors for individuals' reluctance to manage their finances [2][3][4][5]. However, researchers have neglected the influence of contextual anxiety on financial management behavior in financial activities.…”

Section: Introductionmentioning

confidence: 99%

Math Anxiety and Financial Anxiety Predicting Individuals’ Financial Management Behavior

Xin,

Xiao,

Lin

2023

Depression and Anxiety

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Background. In managing finances, people need to process various financial texts containing math (e.g., amount of money and mathematical concepts) and financial information (e.g., funds and bonds). Such information could trigger anxiety related to math and finance; however, previous literature has rarely investigated the prediction role of contextual anxiety on financial management behavior. Therefore, the current study examined how math anxiety and financial anxiety are related to individuals’ financial management behavior assessed by self-report and objective observation, respectively. Methods. Study 1 investigated 186 employees with the math anxiety scale, financial anxiety scale, and financial management behavior scale to explore how math anxiety and financial anxiety predicted financial management behavior. Study 2 used a “choice/no choice” paradigm to observe how the high ( n = 50 ) and low ( n = 53 ) financial anxiety groups chose (or avoided) between a math task and a finance task (as a measurement of financial avoidance). Results. Study 1 showed that financial anxiety fully mediated the negative relationship between math anxiety and financial management behavior and the mediating effect size was −0.24, 95 % CI = − 0.34 , − 0.16 . And compared to math anxiety ( r = − 0.24 , p < 0.01 ), financial anxiety ( r = − 0.45 , p < 0.01 ) was a stronger negative predictor of financial management behavior. Study 2 revealed that, compared to people with low financial anxiety, those with high financial anxiety were 2.75 times more likely to choose financial avoidance. Conclusions. People’s financial management behavior can be predicted by financial anxiety and math anxiety (especially the former), and the two types of anxiety seem to derive more from an irrational self-perception rather than actual ability. So, reducing financial anxiety and math anxiety should come first to motivate people to manage finances.

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Financial literacy is better than income to predict happiness.

Cited by 8 publications

References 56 publications

Provincial marketization and individual financial literacy in China.

Provincial marketization and individual financial literacy in China.

The market mindset erodes social mindfulness

Math Anxiety and Financial Anxiety Predicting Individuals’ Financial Management Behavior

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