Financial knowledge, attitude and behavior: evidence from the Austrian Survey of Financial Literacy
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Financial knowledge, attitude and behavior: evidence from the Austrian Survey of Financial Literacy Pirmin Fessler1 · Maria Silgoner2 · Rosa Weber3
© Springer Science+Business Media, LLC, part of Springer Nature 2019
Abstract This paper provides an in-depth analysis of the links between financial knowledge, attitude and behavior, based on the Austrian contribution to the OECD/INFE survey on financial literacy. Our analysis gives evidence of causal effects of financial knowledge on financial behavior, using a new instrument based on respondents’ newspaper reading habits. We confirm that the selection bias is likely negative, i.e. we would underestimate the causal effect of knowledge on behavior in a classical regression setting. Furthermore, we provide mediation analyses, showing that about 13% of the causal effect of knowledge on behavior is mediated through financial attitude. Keywords Financial literacy · Knowledge · Financial behavior · Survey data · Instrumental variables JEL Classification D14 · I2 · I29
The views expressed in this paper are exclusively those of the authors and do not necessarily reflect those of the OeNB or the Eurosystem. We would like to thank Bettina Greimel-Fuhrmann, as well as several participants at the NOeG Annual Meeting 2019 and an anonymous referee for valuable comments and suggestions. * Pirmin Fessler [email protected] Maria Silgoner [email protected] Rosa Weber [email protected] 1
Economic Analysis and Research Department, Oesterreichische Nationalbank, Vienna, Austria
2
Foreign Research Division, Oesterreichische Nationalbank, Vienna, Austria
3
Department of Sociology, Stockholm University, Stockholm, Sweden
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Empirica
1 Introduction Over the last decades, numerous surveys on the level of financial literacy of the population have been conducted in various countries. At the international level, the OECD/INFE (International Network on Financial Education) initiative to measure financial literacy of the adult population has contributed to this trend, offering an extended survey questionnaire on financial knowledge, attitude and behavior. More than 35 countries around the world applied this questionnaire during the years 2014–2016. This exercise provided a unique cross-country data set of financial literacy, covering also a large set of variables on socio-demographic characteristics and financial involvement of respondents, as well as other relevant controls and instrumental variables. The main cross-country survey results are published in OECD (2016). Financial education has the potential of reducing current financial literacy gaps, and promoting consumer protection and inclusion, which are essential ingredients for financial empowerment of individuals and for overall financial stability. These factors gain further importance with the increasing complexity of economic relationships and financial products. Digitalization and the growing fintech sector might change the nature of financial knowledge needed. Therefore, it is impor
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