Fearless Woman: Financial Literacy, Confidence, and Stock Market Participation

Tabea Bucher-Koenen (), Rob Alessie (), Annamaria Lusardi () and Maarten van Rooij
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Tabea Bucher-Koenen: University of Mannheim and ZEW-Leibniz Center for European Economic Research, 68161 Mannheim, Germany
Rob Alessie: School of Economics and Business, University of Groningen, 9700 AV Groningen, Netherlands
Annamaria Lusardi: Stanford Institute for Economic Policy Research and Graduate School of Business, Stanford, California 94305

Management Science, 2025, vol. 71, issue 9, 7414-7430

Abstract: Women are less financially literate than men, and it has been difficult to determine whether this gap reflects a lack of knowledge or, rather, a lack of confidence. To address this important research question, we designed two survey modules that enable us to calculate the extent to which confidence matters for both financial literacy and behavior. We developed and estimated a model that provides a new measure of financial literacy and disentangles confidence from knowledge. We find that confidence accounts for about 30% of the gender difference in financial literacy. Moreover, both financial knowledge and confidence are linked to stock market participation. We also provide researchers with a method to account for confidence in regressions.

Keywords: financial knowledge; gender gap; measurement error; financial behavior (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:71:y:2025:i:9:p:7414-7430

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