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- Title
Financial Literacy and French Behaviour on the Stock Market.
- Authors
Arrondel, Luc
- Abstract
This article looks back over the different dimensions of financial literacy: theoretical, methodological, empirical and political. The theoretical foundations of the notion of financial literacy are presented with reference to recent contributions by psychological or behavioural economics: "household finance" refers to the concept of financial literacy based on the empirical dead-ends of standard saver theory. This raises the fundamental question as to how to measure and evaluate financial literacy. Here, we are especially interested in the empirical robustness of a standard measure of financial literacy based on three straightforward questions (interest calculations, notion of inflation and risk diversification). Is this measure adequate or do other definitions need to be developed? We use original data from a survey conducted in 2017 that proposes alternative measures. Our results show that the measure in most studies seems a good proxy for a more global measure based on a larger battery of similar questions. Nevertheless, the global measure improves the statistical quality of the measure even though this more sophisticated measure does not statistically significantly improve behavioural regressions.
- Subjects
FINANCIAL literacy; STOCK exchanges
- Publication
Numeracy: Advancing Education in Quantitative Literacy, 2021, Vol 14, Issue 1, p1
- ISSN
1936-4660
- Publication type
Article
- DOI
10.5038/1936-4660.14.1.1356