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Demystifying financial literacy: a behavioral perspective analysis

Author

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  • Ani Caroline Grigion Potrich
  • Kelmara Mendes Vieira

Abstract

Purpose - Financial literacy has been recognized as a key competency. However, there are some gaps such as the relationship with other behavioral factors. Thus, this paper aims to develop a model that would be able to identify the integrate effect of financial literacy on the behavioral factors: materialism, compulsive buying and propensity to indebtedness. Design/methodology/approach - The study investigated 2,487 individuals in Brazil. For an analysis, the authors used confirmatory factorial analysis and structural equations modeling and six research hypotheses. Findings - The main findings showed that the impact of financial literacy on compulsive buying behavior was the greatest of the direct relationships proposed, as well as the total effects of financial literacy on behavioral aspects. Practical implications - The outcomes of this study are important for the development of public policies and to other interested agents, as financial literacy goes beyond the fact that it impacts on the individuals’ financial health only and also helps those who suffer from other psychosocial behaviors. Originality/value - This study is unique and innovative, to the extent that it measures the actual direct and indirect impact of financial literacy on other behavioral factors, which have been so far analyzed in separate. It concluded that financial literacy has much more significant impacts than other academic studies have shown, because under the academic point of view, the central focus up to now has been identifying only its impact on other behaviors.

Suggested Citation

  • Ani Caroline Grigion Potrich & Kelmara Mendes Vieira, 2018. "Demystifying financial literacy: a behavioral perspective analysis," Management Research Review, Emerald Group Publishing Limited, vol. 41(9), pages 1047-1068, May.
    • Handle: RePEc:eme:mrrpps:mrr-08-2017-0263
    DOI: 10.1108/MRR-08-2017-0263
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    Citations

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    Cited by:

    1. Nancy Neoyame Chabaefe & Abubaker Qutieshat, 2024. "Financial Literacy, Financial Education and Financial Experience: Conceptual Framework," International Journal of Economics and Financial Issues, Econjournals, vol. 14(4), pages 44-55, July.
    2. Kwee Kim Peong, 2019. "Determinants of Personal Financial Literacy among Young Adults in Malaysian Accounting Firms," GATR Journals gjbssr524, Global Academy of Training and Research (GATR) Enterprise.
    3. Vineetha Mathew & Santhosh Kumar P K & Sanjeev M A, 2024. "Financial Well-being and Its Psychological Determinants— An Emerging Country Perspective," FIIB Business Review, , vol. 13(1), pages 42-55, January.
    4. Ana KUNDID NOVOKMET & Marija VUKOVIĆ, 2024. "Financial Outcomes Of The Locus Of Control: Pls-Sem Evidence From Croatia," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 19(2), pages 138-154, August.
    5. Silvia Mariela Méndez Prado & Marlon José Zambrano Franco & Susana Gabriela Zambrano Zapata & Katherine Malena Chiluiza García & Patricia Everaert & Martin Valcke, 2022. "A Systematic Review of Financial Literacy Research in Latin America and The Caribbean," Sustainability, MDPI, vol. 14(7), pages 1-43, March.
    6. Shallu Saini & Tejinder Sharma & Satyanarayana Parayitam, 2024. "The Relationship Between Financial Knowledge, Investment Strategy and Satisfaction From Pension Schemes: Evidence From India," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 31(1), pages 101-135, March.
    7. Vieira, Kelmara Mendes & Potrich, Ani Caroline Grigion & Bressan, Aureliano Angel, 2020. "A proposal of a financial knowledge scale based on item response theory," Journal of Behavioral and Experimental Finance, Elsevier, vol. 28(C).

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