Financial Education, Financial Knowledge and Risky Credit Behavior of College Students

Networks Financial Institute Working Paper 2010-WP-05

27 Pages Posted: 15 Nov 2010

See all articles by Jing Jian Xiao

Jing Jian Xiao

University of Rhode Island

Soyeon Shim

University of Arizona - John and Doris Norton School of Family and Consumer Sciences

Joyce Serido

University of Arizona - John and Doris Norton School of Family and Consumer Sciences

Date Written: November 2010

Abstract

The purpose of this study is to examine associations among financial education, financial knowledge, and risky credit behavior of college students. Using data from a sample of first-year college students, we found evidence that taking personal finance courses in high school and college is associated with financial knowledge as well as risky credit behavior. Specifically, both high school and college personal finance courses are associated positively with subjective financial knowledge. Subjective financial knowledge in turn reduces the chance of engaging in risky paying behavior. In addition, objective credit knowledge reduces the likelihood of engaging in both risky paying and borrowing behaviors.

Keywords: financial education, financial literacy, financial behavior, young adult, consumer credit

Suggested Citation

Xiao, Jing Jian and Shim, Soyeon and Serido, Joyce, Financial Education, Financial Knowledge and Risky Credit Behavior of College Students (November 2010). Networks Financial Institute Working Paper 2010-WP-05, Available at SSRN: https://ssrn.com/abstract=1709039 or http://dx.doi.org/10.2139/ssrn.1709039

Jing Jian Xiao (Contact Author)

University of Rhode Island ( email )

Transition Center
Kingston, RI 02881
United States
401-874-2547 (Phone)
401-874-4020 (Fax)

HOME PAGE: http://www.uri.edu/hss/hdf/faculty/JingJXiao.htm

Soyeon Shim

University of Arizona - John and Doris Norton School of Family and Consumer Sciences ( email )

650 N Park Ave
Tucson, AR 85721
United States

Joyce Serido

University of Arizona - John and Doris Norton School of Family and Consumer Sciences ( email )

650 N Park Ave
Tucson, AR 85721
United States

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