Characterizing Financial and Statistical Literacy

Amalia Di Girolamo, Glenn Harrison, Morten Lau and J. Swarthout

No 2013-04, Experimental Economics Center Working Paper Series from Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University

Abstract: We characterize the literacy of an individual in a domain by their elicited subjective belief distribution over the possible responses to a question posed in that domain. We consider literacy across several financial, economic and statistical domains. We find considerable demographic heterogeneity in the degree of literacy. We also characterize the degree of consistency within a sample about their knowledge, even when that knowledge is imperfect. We show how uncertainty aversion might be a normatively attractive behavior for individuals who have imperfect literacy. Finally, we discuss extensions of our approach to characterize financial capability, the consequences of non-literacy, social literacy, and the information content of hypothetical survey measures of literacy.

Pages: 71
Date: 2013-04
New Economics Papers: this item is included in nep-cbe and nep-exp
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Citations: View citations in EconPapers (2)

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