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Financial Literacy and Risk-Taking of Households in the Hungarian Central Great Plain

Katalin Botos (), József Botos, Daniel Beres (), József Csernák and Erzsébet Németh
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Katalin Botos: Pázmány Péter Catholic University
József Botos: former Director General of the Central Administration of National Insurance
József Csernák: Károly Róbert College

Public Finance Quarterly, 2012, vol. 57, issue 3, 267-285

Abstract: The intense innovational activity typical of the financial sector in the last 30 years requires households to have increasingly comprehensive and complex financial knowledge. The main objective of our study, therefore, was to assess and evaluate risk management activity, which is an integral part of financial literacy, using the questionnaire survey focusing on households of the Central Great Plain and conducted by the Kossuth College of Lakitelek as basis. We have determined that the households examined are conservative with respect to their finances and strive to minimise risks as much as possible, which is commendable. Unfortunately, however, they lack the financial knowledge to make prudent decisions. In truth, risk management strategy based on inadequate knowledge, but thought to be sound is nothing more than a substitution of risk types, the significance of which households are unable to assess realistically as they lack necessary financial knowledge.

Keywords: financial literacy; risk; risk management; Central Great Plain (search for similar items in EconPapers)
JEL-codes: D12 D14 D69 D82 G02 G20 H31 Z13 (search for similar items in EconPapers)
Date: 2012
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Handle: RePEc:pfq:journl:v:57:y:2012:i:3:p:267-285