Does financial literacy affect the value of financial advice? A contingent valuation approach

Yogesh Chauhan and Dipanjan Kumar Dey

Journal of Behavioral and Experimental Finance, 2020, vol. 25, issue C

Abstract: The paper examines the determinants of investors’ willingness to pay (WTP) for suitable advice. We use contingent valuation, a method frequently used to estimate the value of non-market goods and services, with a unique survey data to estimate WTP for suitable advice. We find that investors with a high level of financial literacy recognize the value of financial advice; therefore, they have a higher WTP. These investors are also less likely to consult with a financial adviser if the advisory fee exceeds investors’ maximum WTP. We also suggest the policy implications of our empirical results.

Keywords: Willingness to pay; Financial literate; Financial advice; Mutual funds; Household finance (search for similar items in EconPapers)
JEL-codes: D80 G11 G24 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:25:y:2020:i:c:s2214635019302606

DOI: 10.1016/j.jbef.2020.100268

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