Debt literacy and debt advice-seeking behaviour among Facebook users: the role of social networks

Andrzej Cwynar (), Wiktor Cwynar (), Mieczysław Kowerski (), Kamil Filipek () and Przemysław Szuba ()
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Andrzej Cwynar: Institute of Public Administration, Business and Management, University of Economics and Innovation, Lublin, Poland
Wiktor Cwynar: Institute of Public Administration, Business and Management, University of Economics and Innovation, Lublin, Poland
Mieczysław Kowerski: Institute of Economics, The State School of Higher Education, Zamość, Poland
Kamil Filipek: Institute of Sociology, Maria Curie-Skłodowska University, Lublin, Poland
Przemysław Szuba: Exacto Limited, Rzeszów, Poland

Baltic Journal of Economics, 2020, vol. 20, issue 1, 1-33

Abstract: Professional advice can be perceived as a means to tackle shortcomings in the objectively measured financial literacy of consumers. However, most studies suggest that less financially literate individuals are less likely to seek experts’ financial advice. At the same time, it has been shown that financial confidence – or subjectively perceived financial literacy – is positively correlated with the propensity to request such professional advice. This study examines these puzzling effects in a sample of 1,055 Facebook users in Poland, and within an analytical framework that allows control of the potential endogeneity of financial literacy to professional advice. A series of regressions applied to the results of our survey showed that objective debt literacy – a little-studied aspect of financial literacy – was insignificant in explaining advice- seeking behaviour, although the decisions to ask for advice were positively dependent on subjective debt literacy. Such outcomes prove that subjective financial literacy should be treated as a separate construct which can predict financial behaviour above and beyond predictions based on objective financial literacy. Our findings also suggest a positive role for social networks in inducing desired financial actions. We found that respondents having access to greater resources embedded in their social networks are more inclined to seek professional debt advice.

Keywords: Debt literacy; financial literacy; financial confidence; advice-seeking; social networks; Facebook (search for similar items in EconPapers)
JEL-codes: D12 D14 G20 G53 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (6)

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