Financial literacy, financial advice, and financial behavior

By Oscar Stolper, A. Walter. Journal of Business Economics, 2017

414 citations recorded by the source corpus.

In this survey, we review the voluminous body of literature on the measurement and the determinants of financial literacy. Wherever possible, we supplement existing findings with recent descriptive evidence of German households’ financial literacy levels based on the novel Panel on Household Finances dataset, a large-scale survey administered by the Deutsche Bundesbank and representative of the financial situation of households in Germany. Prior research not only documents generally low levels of financial literacy but also finds large heterogeneity in financial literacy across the population, suggesting that economically vulnerable groups are placed at further disadvantage by their lack of financial knowledge. In addition, we assess the literature evaluating financial education as a means to improve financial literacy and financial behavior. Our survey suggests that the evidence with respect to the effectiveness of the programs is rather disappointing. We also review the role of individuals’ financial literacy for the use of professional financial advice and assess whether expert intervention can serve as a substitute to financial literacy. We conclude by discussing several directions for future research.

Subfields: Accounting, Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/ea990bccbdb09e1e574090c6c126459f5d7afdba

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. Lennart Ante
2. Amandeep Dhir
3. Shalini Talwar

In Economics and Econometrics

1. Lennart Ante
2. Amandeep Dhir
3. Shalini Talwar

In Sociology and Political Science

1. Shalini Talwar
2. Amandeep Dhir
3. Puneet Kaur
4. Manish Talwar
5. Sushant Kumar
6. Arunima Shah

Citations in the corpus

• Has financial attitude impacted the trading activity of retail investors during the COVID-19 pandemic? (2020, background): “Since financial decision-making is tied to individuals’ geographic location (Stolper and Walter, 2017), the findings of our study can help regulators and firms develop a better understanding of Indian investors.”
• Ownership, uses and perceptions of cryptocurrency: Results from a population survey (2021, background): “The authors point out that financial literacy may improve the capacity for good financial decisions (e.g. Stolper & Walter, 2017), i.e. investment decisions, but not on the technological level (Arias-Oliva et al., 2019).”
• Financial literacy: A systematic review and bibliometric analysis (2020, neutral): “Stolper and Walter (2017) examined financial literacy amongst adults across 22 single country studies, using the Big Three measure.”
• Building financial resilience through financial and digital literacy in South Asia and Sub-Saharan Africa (2020, neutral): “However, these studies also have pointed to low levels of financial literacy around the world, as well as large heterogeneities across populations, especially vulnerable subgroups with low socioeconomic status (De Beckker, De Witte, & Van Campenhout, 2019; OECD/INFE, 2015; Stolper & Walter, 2017).”