Subjective Belief Distributions and the Characterization of Economic Literacy

37 Pages Posted: 4 Apr 2016

See all articles by Amalia Di Girolamo

Amalia Di Girolamo

University of Birmingham

Glenn W. Harrison

Georgia State University - J. Mack Robinson College of Business

Morten I. Lau

Durham Business School

J. Todd Swarthout

Georgia State University - Andrew Young School of Policy Studies

Abstract

We characterize the literacy of an individual in a domain by their elicited subjective belief distribution over the possible responses to a question posed in that domain. By eliciting the distribution, rather than just the answers to true/false or multiple choice questions, we can directly measure the confidence that an individual has about their knowledge of some fact. We consider literacy across several financial and economic domains. We find considerable demographic heterogeneity in the degree of literacy. We also measure the degree of consistency within a sample about their knowledge, even when that knowledge is imperfect.

Keywords: subjective beliefs, economic literacy

JEL Classification: C91, D03, D83

Suggested Citation

Di Girolamo, Amalia and Harrison, Glenn William and Lau, Morten Igel and Swarthout, J. Todd, Subjective Belief Distributions and the Characterization of Economic Literacy. IZA Discussion Paper No. 9856, Available at SSRN: https://ssrn.com/abstract=2757966

Amalia Di Girolamo (Contact Author)

University of Birmingham

Glenn William Harrison

Georgia State University - J. Mack Robinson College of Business ( email )

P.O. Box 4050
Atlanta, GA 30303-3083
United States
407-489-3088 (Phone)
253-830-7636 (Fax)

HOME PAGE: http://www.cear.gsu.edu/

Morten Igel Lau

Durham Business School ( email )

Mill Hill Lane
Durham, DH1 3LB
United Kingdom

J. Todd Swarthout

Georgia State University - Andrew Young School of Policy Studies ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

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