Abstract

http://ssrn.com/abstract=2165564
 


 



Aging, Financial Literacy, and Fraud


Keith Jacks Gamble


DePaul University - Department of Finance

Patricia Boyle


Rush University - Rush University Medical Center

Lei Yu


Rush University

David Alan Bennett


Rush University - Rush University Medical Center

November 21, 2013


Abstract:     
This study examines how cognitive changes associated with aging impact the financial decision making capability of older Americans. We find that a decrease in cognition is associated with a decrease in financial literacy. Decreases in episodic memory, perceptual speed, and visuospatial ability are associated with a decrease in numeracy, and decreases in episodic and semantic memory are associated with a decrease in financial knowledge. A decrease in cognition also predicts a drop in self-confidence in general, but importantly, it is not associated with a drop in confidence in managing one's own finances. Participants experiencing decreases in cognition do show an increased likelihood of getting help with financial decisions; however, many participants experiencing significant drops in cognition still do not get help. This study also examines the risk factors for an older American being victimized by financial fraud. We find that overconfidence in one’s financial knowledge is a significant predictor of the odds of falling victim.

Number of Pages in PDF File: 41

Keywords: aging, cognitive decline, financial literacy, financial fraud, overconfidence, retirement

JEL Classification: G00, H31

working papers series


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Date posted: October 22, 2012 ; Last revised: November 22, 2013

Suggested Citation

Gamble, Keith Jacks and Boyle, Patricia and Yu, Lei and Bennett, David Alan, Aging, Financial Literacy, and Fraud (November 21, 2013). Available at SSRN: http://ssrn.com/abstract=2165564 or http://dx.doi.org/10.2139/ssrn.2165564

Contact Information

Keith Jacks Gamble (Contact Author)
DePaul University - Department of Finance ( email )
1 East Jackson Blvd.
Chicago, IL 60604-2287
United States
Patricia Boyle
Rush University - Rush University Medical Center ( email )
Health Systems Management
1700 West Van Buren Street, TOB Suite 126B
Chicago, IL
United States
Lei Yu
Rush University ( email )
Chicago, IL
United States
David Alan Bennett
Rush University - Rush University Medical Center ( email )
Health Systems Management
1700 West Van Buren Street, TOB Suite 126B
Chicago, IL
United States
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