Whom to Educate? Financial Fraud and Investor Awareness

Gui, Zhengqing; Huang, Yangguang; Zhao, Xiaojian

doi:10.2139/ssrn.3025400

Cited by 5 publications

(1 citation statement)

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“…The present study found that participants with risk-seeking preferences or over 65 were at higher risk of fraud victimization, which can help identify vulnerable groups and design interventions to protect citizens from fraud victimization. For example, a study found that risk preferences are linked to investor behaviors, and a simple education program can reduce the proportion of naive investors and improve investor awareness, allowing them to make better decisions and reducing the firms' incentive to commit financial fraud (Gui et al, 2017).…”

Section: Discussionmentioning

confidence: 99%

Association of Financial Literacy and Risk Preference With Fraud Exposure and Victimization Among Middle-Aged and Older Adults in China

Kuo

Tseng

2022

J Appl Gerontol

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Fraud jeopardizes older people’s physical, mental, and economic well-being, and financial literacy and risk preference have been linked to the risk of fraud experience. Given the inconsistent evidence, we investigated whether financial literacy and risk preferences were associated with fraud exposure and victimization among middle-aged and older adults. We analyzed data from the 2015 China Household Finance Survey, including 22,121 participants aged 50 and older. Poisson regression models were conducted to determine the association of financial literacy and risk preference with fraud experience. We found that financial literacy and risk preference were positively associated with fraud exposure and victimization. The prevalence of fraud victimization among middle-aged and older adults with the highest financial literacy and risk preference levels was 46.5% and 45.8% higher than among those with the lowest levels, respectively. These findings suggested that basic financial knowledge is insufficient to protect older people from fraud exposure and victimization.

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Section: Discussionmentioning

confidence: 99%