Financial competence and expectations formation : evidence from Australia
Date
2012
Authors
Bateman, H.
Eckert, C.
Geweke, J.
Louviere, J.
Thorp, S.
Satchell, S.
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Journal article
Citation
Economic Record, 2012; 88(280):39-63
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Abstract
We study the financial competence of Australian retirement savers using self-assessed and quantified measures. Responses to financial literacy questions show large variation and compare poorly with some international surveys. Basic and sophisticated financial literacy vary significantly with most demographics, self-assessed financial competence, income, superannuation accumulation and net worth. General numeracy scores are largely constant across gender, age, higher education and income. Financial competence also significantly affects expectations of stock market performance. Using a discrete choice model, we show that individuals with a higher understanding of risk, diversification and financial assets are more likely to assign a probability to future financial crises rather than expressing uncertainty.
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Data source: supporting information, https://doi.org/10.1111/j.1475-4932.2011.00766.x
Link to a related website: https://opus.lib.uts.edu.au/bitstream/10453/18826/1/2011001562.pdf, Open Access via Unpaywall
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Copyright 2011 The Economic Society of Australia