Modeling Financial Risk Attitude: The Role of Education And Financial Literacy

Iannario Maria (), Monti Anna Clara () and Domenico Scalera
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Iannario Maria: University of Naples Federico II, Department of Political Science, Italy
Monti Anna Clara: University of Sannio, Department of Law and Economics, Italy

Financial Internet Quarterly (formerly e-Finanse), 2024, vol. 20, issue 2, 1-14

Abstract: This paper studies the relationship between risk propensity, education and financial literacy. The results of the empirical investigation confirm the importance of the key explanatory variables of education and financial competence. Since they are both included in the model, the different roles of each are singled out. In particular, while education turns out to be a factor contributing to raising risk tolerance, financial literacy tends to reduce risk propensity. Risk attitude is evaluated by self-reported assessment and modeled through cumulative logit models. In order to handle anomalous data, M estimators with a bounded influence function are considered.

Keywords: Financial Literacy; Ordinal Response Models; Risk Attitude; Robust Estimation (search for similar items in EconPapers)
JEL-codes: C13 D14 G53 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:finiqu:v:20:y:2024:i:2:p:1-14:n:1001

DOI: 10.2478/fiqf-2024-0008

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