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The effect of self-confidence on financial literacy

F. Alfonso Arellano (), Noelia Camara and David Tuesta ()

No 1428, Working Papers from BBVA Bank, Economic Research Department

Abstract: This study analyses whether self-confidence affects financial abilities of young people in Spain, through financial literacy. We use data from the Programme for International Student Assessment (PISA) Financial Literacy (2012) report, conducted by the OECD. Our hypothesis is that non-cognitive factors are important to establish young people s financial literacy. Financial knowledge, together with other personal attitudes, determines people s financial behaviour. We focus on the role of self-confidence in four dimensions. First, the student’s self-confidence in the environment of their college; second, self-confidence referring to the utility found at school; third, self-confidence in relation to the results obtained; and finally, self-confidence in a broader sense. Our multi-level estimates show that students with higher levels of self-confidence score higher in financial literacy tests, whatever the dimension considered. Beyond the individual s inherent characteristics, there are other factors such as maturity, gender, socio-economic characteristics and the surroundings, which also influence financial literacy.

Keywords: Developed Economies; Emerging Economies; Financial Inclusion; Global; Spain (search for similar items in EconPapers)
JEL-codes: C81 D83 I00 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2014-10
New Economics Papers: this item is included in nep-edu and nep-mfd
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