Defining and Measuring Financial Literacy

28 Pages Posted: 3 Nov 2009

See all articles by Angela Hung

Angela Hung

RAND Corporation - Labor and Population

Andrew M. Parker

RAND Corporation

Joanne Yoong

RAND Corporation

Date Written: September 2, 2009


Current economic conditions have raised serious concerns about Americans' financial security, especially for those who lack the skills and resources to withstand financial market downswings and take advantage of upswings. However, significant debate continues about the role of financial literacy, the extent of the problem it truly represents, and the best way to address it. A large part of this debate may be linked to the fact that a great deal of variation continues to exist in how researchers define and measure financial literacy itself. By providing a review of theoretical and operational approaches to financial literacy, as well as a conceptual model and composite definition of financial literacy, this paper contributes towards further sharpening this debate.

Suggested Citation

Hung, Angela and Parker, Andrew M. and Yoong, Joanne, Defining and Measuring Financial Literacy (September 2, 2009). RAND Working Paper Series WR-708. Available at SSRN: or

Angela Hung (Contact Author)

RAND Corporation - Labor and Population ( email )

United States

Andrew M. Parker

RAND Corporation ( email )

1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
United States

Joanne Yoong

RAND Corporation ( email )

1200 South Hayes St
Arlington, VA 22202
United States

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