Implications of behavioural economics for financial literacy and public policy

Altman, Morris

doi:10.1016/j.socec.2012.06.002

Cited by 104 publications

(77 citation statements)

References 14 publications

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“…From a different perspective, literature in economics and behavioural finance suggests that the difficulty of processing complex information may hamper financial decision making and that the latter can be improved by providing decision makers with better quality information (Altman, 2012;Garcia, 2013). According to OECD guidelines (OECD, 2013a), effective financial education programs should: (i) offer material in formats and locations that are easy to access; (ii) help consumers to simplify financial decisions, for instance, breaking them into intermediate steps or providing rules-of-thumb or problem-solving strategies; (iii) increase saliency by providing participants with regular reminders or tools to track and visualize individual progress.…”

Section: Related Literaturementioning

confidence: 99%

Adult financial literacy and households’ financial assets: the role of bank information policies

2016

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We investigate the role of bank information policies in fostering the accumulation of financial knowledge. Exploiting the exogenous variability induced by the presence of a consortium of banks in Italy (PattiChiari), we find that these policies are effective for a small subsample of the population (5-10%) and lead to an increase in financial literacy by about 10%, on average. Compliance is highest among low-educated respondents older than 60 years. We use these policies as an instrumental variable to estimate the effect of financial literacy on financial assets. We find that one standard deviation increase in financial literacy determines an increase in household financial assets by 35% of a standard deviation (8,000 euros). Effects are heterogeneous in the population and highest among elderly low-educated households.

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Section: Related Literaturementioning

confidence: 99%

Adult financial literacy and households’ financial assets: the role of bank information policies

2016

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“…However, brokers and advisors, of various types, have been by no means exempt from previous misselling scandals and in some cases, such as pensions and endowments, have arguably been substantially culpable. Therefore, trust can potentially have negative consequences, as consumers use trust as a form of "heuristic" in making decisions, rather than enter into any more detailed or informed evaluations (Altman, 2012).…”

Section: Figure 1: Overall Trends In Trust In the Sectormentioning

confidence: 99%

Trust in financial services: Retrospect and prospect

et al. 2015

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“…(Huston, 2010). If individuals have positive attitude to take risky decisions that can be improved by participation in the decision making process and it can also be corrected with a facilitation of quality information to decision makers (Altman, 2012). From the above discussion, we can conclude that financial literacy has a positive relationship with investment decision making.…”

Section: Financial Literacy and Investment Decisionmentioning

confidence: 91%

“…To make an effective utilization of money, one can save or invest it in financial market and should have important financial information in order to know the trading of financial product in market (Zvaríková & Majerová, 2013). Financial literacy is the combination of knowledge, skills, and confidence necessary to make liable financial decisions (Altman, 2012). There is a positive relationship between education level and literacy.…”

Section: Financial Literacy and Investment Decisionmentioning

confidence: 99%

Effect of Emotional Intelligence on Investment Decision Making With a Moderating Role of Financial Literacy

Hadi¹

2017

CUBR

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This study explores the impact of emotional intelligence on investment decision making with a moderating role of financial literacy. The data are collected by using convenient sampling technique through a 5-point Likert scale questionnaire from a sample of 160 investors from stock exchange and banks. We found a positive and significant relationship between emotional intelligence and investment decision making and the same between financial literacy and investment decision. In addition, when we examined these two relationships under financial literacy, the relationship between emotional intelligence and investment decision making was further strengthened and significantly associated. The results suggest that to make suitable investment decisions, investors should have control on their emotions. Moreover, financial literacy of investors moderates this relationship. Investor's decision making may depend on other factors that need to be explored for in addition to what we have found in our study.The sample size and geographical coverage should increase to consider the importance of this study.

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Implications of behavioural economics for financial literacy and public policy

Cited by 104 publications

References 14 publications

Adult financial literacy and households’ financial assets: the role of bank information policies

Adult financial literacy and households’ financial assets: the role of bank information policies

Trust in financial services: Retrospect and prospect

Effect of Emotional Intelligence on Investment Decision Making With a Moderating Role of Financial Literacy

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