Ask a Question and Get an Answer: a Study of the Framing Effect on Financial Literacy in Italy

Giovanna Paladino

Journal of the Knowledge Economy, 2024, vol. 15, issue 3, No 50, 11318-11354

Abstract: Abstract This paper takes its cue from the relevance of the framing effect related to behavioral biases associated with economic decision-making. Most attempts to measure financial literacy rely on surveys that include standardized multiple-choice questions. We aim to detect the distortive effect, if any, of the standard questionnaire on the measurement of the level of financial literacy that results from the way questions are expressed. A survey conducted in October 2021 involving 2,500 individuals representative of the Italian population—the worst performer in financial literacy among the G7 countries—made it possible to evaluate whether questions with alternative wording created higher respondent engagement, determined other answers, and improved performance. The descriptive and regression analysis showed that the wording effect mattered in three out of four questions. More engaging words mitigated the gender effect by reducing the probability of women choosing the “I do not know” option. However, while there was evidence of an increase in the percentage of correct answers to individual questions, the overall financial literacy level showed no improvement. The regression analysis found that the likelihood of being financially literate, independently of the type of question, significantly depended on sociodemographic variables (gender, age, geographical area, and level of education) and self-evaluation of digital and economic skills. In addition, knowledge of basic math played a key role. Those who know how to calculate a percentage correctly had a notably higher probability of being financially literate. This evidence has clear policy implications since it highlights the necessity of investing in digital and math education to fill gender and intergenerational literacy gaps.

Keywords: Financial literacy; Framing; Gender differences; Question format (search for similar items in EconPapers)
JEL-codes: D14 D91 G53 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s13132-023-01525-0 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:jknowl:v:15:y:2024:i:3:d:10.1007_s13132-023-01525-0

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/13132

DOI: 10.1007/s13132-023-01525-0

Access Statistics for this article

Journal of the Knowledge Economy is currently edited by Elias G. Carayannis

More articles in Journal of the Knowledge Economy from Springer, Portland International Center for Management of Engineering and Technology (PICMET)
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().