Edited by Franklin G. Mixon and Richard J. Cebula
Chapter 14: Assessing the economic and financial knowledge of adults
AbstractThe chapter investigates factors that influence adults' knowledge of economics and personal finance. The authors surveyed a sample of adults with a norm-referenced exam that includes questions specific to economics knowledge and questions specific to financial knowledge, along with a background questionnaire. A two-equation seemingly unrelated regression system was estimated that included the percent correct economics sub-score and percent correct financial sub-score as separate dependent variables as functions of the same set of background explanatory variables. They found that some factors such as age, education level and income were associated with how much adults know about finance and economics, with the larger estimated influences found with respect to financial knowledge. Formal economics coursework influenced knowledge of economics, but not financial knowledge, while owning a home was associated only with greater knowledge of finance. The results suggest life experiences influence financial knowledge more than economics knowledge, and formal instruction in personal finance alone is insufficient preparation for making sound economic decisions on financial matters. An understanding of the economic way of thinking, learned mostly though formal instruction, combined with knowledge of personal finance can help people make wiser financial decisions.
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.