The Role of Financial Literacy in Households’ Asset Accumulation Process: Evidence from Ghana

27 Pages Posted: 4 Apr 2022

See all articles by Isaac Koomson

Isaac Koomson

The University of Queensland; Network for Socioeconomic Research and Advancement (NESRA)

Renato Villano

University of New England (Australia) - UNE Business School

David Hadley

University of New England (Australia) - UNE Business School

Date Written: March 10, 2022

Abstract

This paper examines the impact of financial literacy training on household asset accumulation using data collected from a randomised controlled trial implemented in Ghana. Financial assets are measured using account holdings and savings while durable assets and their decomposed components are captured using their total values. After testing for baseline balance, impact is estimated using treatment effect models. We find that financial literacy training plays a significant role in accumulation of both financial and durable assets, but the impact is more evident in the accumulation of productive durable assets. Our overall findings on productive and non-productive assets are robust to alternative conceptualisations of what constitutes productive and non-productive assets. Our results also show that financial literacy training has an impact on the accumulation of both total and productive assets in female-beneficiary households, as well as enhancing account holdings for females, although this effect was larger for males. The analyses for different age cohorts also revealed that financial literacy training results in higher asset accumulation among younger household heads.

Keywords: Financial literacy; Asset accumulation; Welfare; Gender; Ghana

JEL Classification: C93, D14, D91

Suggested Citation

Koomson, Isaac and Villano, Renato and Hadley, David, The Role of Financial Literacy in Households’ Asset Accumulation Process: Evidence from Ghana (March 10, 2022). Available at SSRN: https://ssrn.com/abstract=4054089 or http://dx.doi.org/10.2139/ssrn.4054089

Isaac Koomson (Contact Author)

The University of Queensland ( email )

St Lucia
Brisbane, Queensland 4072
Australia

Network for Socioeconomic Research and Advancement (NESRA) ( email )

Network for Socioeconomic Research and Advancement
Accra
Ghana

Renato Villano

University of New England (Australia) - UNE Business School

Armidale, NSW 2351
Australia

David Hadley

University of New England (Australia) - UNE Business School ( email )

Armidale, NSW 2351
Australia

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