Aging, Financial Literacy, and Fraud

42 Pages Posted: 30 Nov 2013

See all articles by Keith Jacks Gamble

Keith Jacks Gamble

Middle Tennessee State University

Patricia Boyle

Rush University - Medical Center

Lei Yu

Rush University

David Bennett

Rush University - Medical Center

Multiple version iconThere are 2 versions of this paper

Date Written: November 28, 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.

Suggested Citation

Gamble, Keith Jacks and Boyle, Patricia and Yu, Lei and Bennett, David, Aging, Financial Literacy, and Fraud (November 28, 2013). Netspar Discussion Paper No. 11/2013-066. Available at SSRN: https://ssrn.com/abstract=2361151 or http://dx.doi.org/10.2139/ssrn.2361151

Keith Jacks Gamble (Contact Author)

Middle Tennessee State University ( email )

MTSU Box 27
Murfreesboro, TN 37129
United States

Patricia Boyle

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 Bennett

Rush University - Medical Center ( email )

Health Systems Management
1700 West Van Buren Street, TOB Suite 126B
Chicago, IL
United States

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