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Are You Financially Literate or Not? Experimental Evidence on Discrepancies between Two Metrics

Author

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  • Muzaffarjon Ahunov

    (Endicott College of International Studies, Woosong University, Jayang-Dong, Dong-gu Daejeon, South Korea)

  • Leo Van Hove

    (Department of Applied Economics (APEC), Vrije Universiteit Brussel (Free University of Brussels), Brussels, Belgium)

Abstract

This note reports on an online, within-subjects experiment with a convenience sample of 206 respondents. The experiment consisted in having the same set of respondents taking not one but two of the financial literacy tests that are popular in the literature, namely the Big Three and the Standard & Poor’s. Disturbingly, we find that 37 per cent of the respondents are considered literate by one test but illiterate by the other. One explanation is that the difficulty level of questions that are relatively similar across the two approaches would nevertheless appear to differ. Another explanation involves the minimum number of correct answers needed for someone to be classified as financially literate. We show that, at least for our sample, a solution might consist in removing these thresholds. The differences in raw scores between the two tests proved to be not statistically significant.

Suggested Citation

  • Muzaffarjon Ahunov & Leo Van Hove, 2025. "Are You Financially Literate or Not? Experimental Evidence on Discrepancies between Two Metrics," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 75(1), pages 59-75, March.
    • Handle: RePEc:fau:fauart:v:75:y:2025:i:1:p:59-75
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    File URL: https://journal.fsv.cuni.cz/mag/article/show/id/1545
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    More about this item

    Keywords

    financial literacy; financial knowledge; Standard & Poor's; Big Three; OECD/INFE; cross-country analysis;
    All these keywords.

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • G53 - Financial Economics - - Household Finance - - - Financial Literacy
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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