Identifying Financially Illiterate Groups: An International Comparison

International Journal of Consumer Studies 2019, 43(5), 490–501.

20 Pages Posted: 25 Apr 2019 Last revised: 4 Sep 2019

See all articles by Kenneth De Beckker

Kenneth De Beckker

KU Leuven - Faculty of Business and Economics (FEB)

K. De Witte

University of Leuven (KUL); Maastricht University

Geert Van Campenhout

KU Leuven - FEB@HUBrussel

Date Written: March 26, 2019

Abstract

Targeted policy interventions are more effective than one-size-fits-all initiatives. This paper proposes the use of k-means cluster analysis to identify vulnerable groups with respect to financial literacy. Using a rich sample of 12 countries, we distinguish four groups with varying financial literacy levels, and examine their socio-economic characteristics. The results suggest that individuals in the most vulnerable financial illiterate groups are on average, single, less-educated, and unemployed with low incomes. This contrasts with those in the strongest group: individuals with the highest financial knowledge, financial behaviour and financial attitudes scores are on average highly-educated males who live together with a partner. They earn a high income and hold several financial products. Integrating these insights into national strategies which promote financial literacy will not only lead to more effective but also to more efficient policy initiatives by focusing on the particular weaknesses of certain subgroups and by using the appropriate transmission channels.

Keywords: Financial Literacy, Financial Knowledge, Financial Behaviour, Financial Attitudes, Cluster Analysis

JEL Classification: C38, D12, D14, I2

Suggested Citation

De Beckker, Kenneth and De Witte, Kristof and Van Campenhout, Geert, Identifying Financially Illiterate Groups: An International Comparison (March 26, 2019). International Journal of Consumer Studies 2019, 43(5), 490–501. . Available at SSRN: https://ssrn.com/abstract=3360483 or http://dx.doi.org/10.2139/ssrn.3360483

Kenneth De Beckker (Contact Author)

KU Leuven - Faculty of Business and Economics (FEB) ( email )

Warmoesberg 26
Brussels, B-1000
Belgium

Kristof De Witte

University of Leuven (KUL) ( email )

Naamsestraat 69
Leuven, Vlaams Brabant B-3000
Belgium

HOME PAGE: http://www.feb.kuleuven.be

Maastricht University ( email )

Boschstraat 24
Maastricht, Vlaams-Brabant 6211 AX
Netherlands
003216326656 (Phone)

HOME PAGE: http://www.feb.kuleuven.be

Geert Van Campenhout

KU Leuven - FEB@HUBrussel ( email )

Warmoesberg 26
Brussel, 1000
Belgium

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