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Financial literacy of Portuguese undergraduate students in polytechnics: does the area of the course influence financial literacy?

Author

Listed:
  • Paula Sarabando

    (School of Technology and Management, Polytechnic Institute of Viseu, Viseu, Portugal)

  • Roge rio Matias

    (School of Technology and Management, Polytechnic Institute of Viseu, Viseu, Portugal)

  • Pedro Vasconcelos

    (PricewaterhouseCoopers, Portugal)

  • Tiago Miguel

    (School of Technology and Management, Polytechnic Institute of Viseu, Viseu, Portugal)

Abstract

Financial literacy seems to be more important and focused than ever. Several recent studies have found that Portugal is at bottom of the table compared to the Eurozone countries regarding financial literacy. As it’s a key factor in the development of a country, it appears to be crucial to understand what people know about financial matters when they complete compulsory schooling. With a sample of 296 Portuguese students who enrolled in the polytechnic higher education system for the first time, we studied if they understand simple concepts related to financial issues (such as loans), as well as whether they are aware of the risk of not recovering the money invested that is embedded in some of the most talked-about and common financial products that are available in the market. This last objective seems to be relevant since a lot of fraudulent schemes involving teenagers, young adults, and financial markets have emerged in recent years. From the results, some disturbing conclusions can be drawn. For instance, more than two-thirds of the sample do not know what Euribor is (similar result regarding Spread). About a third of the simple do not understand inflation’s consequences. 16,9% do not know what term deposits are, and derivative products and saving certificates are seen as very alike regarding the risk they represent. Students who chose a business-related course as their first choice when applying showed a higher level of financial literacy, although it is still low compared to what one would expect.

Suggested Citation

  • Paula Sarabando & Roge rio Matias & Pedro Vasconcelos & Tiago Miguel, 2023. "Financial literacy of Portuguese undergraduate students in polytechnics: does the area of the course influence financial literacy?," Journal of Economic Analysis, Anser Press, vol. 2(2), pages 96-113, April.
    • Handle: RePEc:bba:j00001:v:2:y:2023:i:2:p:96-113:d:40
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    References listed on IDEAS

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    1. Calvin Mudzingiri & John W. Muteba Mwamba & Jacobus Nicolaas Keyser, 2018. "Financial behavior, confidence, risk preferences and financial literacy of university students," Cogent Economics & Finance, Taylor & Francis Journals, vol. 6(1), pages 1512366-151, January.
    2. Pascal Bruhn & Dietmar Ernst, 2022. "Assessing the Risk Characteristics of the Cryptocurrency Market: A GARCH-EVT-Copula Approach," JRFM, MDPI, vol. 15(8), pages 1-28, August.
    3. Hermansson, Cecilia & Jonsson, Sara, 2021. "The impact of financial literacy and financial interest on risk tolerance," Journal of Behavioral and Experimental Finance, Elsevier, vol. 29(C).
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