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Socioeconomic Sustainability for Low-Income Households: The Mediating Role of Financial Well-Being

Author

Listed:
  • Ananthan Munisamy

    (Faculty of Education, Universiti Kebangsaan Malaysia, Bangi 43600, Malaysia)

  • Sheerad Sahid

    (Faculty of Education, Universiti Kebangsaan Malaysia, Bangi 43600, Malaysia)

  • Muhammad Hussin

    (Faculty of Education, Universiti Kebangsaan Malaysia, Bangi 43600, Malaysia)

Abstract

Financial literacy contributes to the economic well-being of every country. Specifically, the financial literacy level of low-income households is crucial in the process of developing and building economic potential. Moreover, the knowledge, attitude, and behavior of families are essential to the financial sustainability and money-wise behavior of low-income households. Thus, financial literacy and financial well-being are vital for low-income households to survive in highly competitive marketplaces and sustain their socioeconomic status. This study intends to examine the impact of financial literacy on the socioeconomic status of low-income households. A self-administered survey questionnaire was employed, and the sample consists of 282 randomly selected respondents from low-income households in Malaysia. The data were analyzed using the Structural Equation Modelling procedure in IBM-SPSS-AMOS 26.0 to examine the causal effect. The results showed that financial literacy (consisting of financial knowledge, financial behavior, and financial attitudes) has a positive and significant impact on the socioeconomic status of low-income households. Moreover, financial well-being also mediated the effect of financial literacy on socioeconomic status. The research results provide new ideas and perspectives for improving money-wise mechanisms and the socioeconomic sustainability of low-income households.

Suggested Citation

  • Ananthan Munisamy & Sheerad Sahid & Muhammad Hussin, 2022. "Socioeconomic Sustainability for Low-Income Households: The Mediating Role of Financial Well-Being," Sustainability, MDPI, vol. 14(15), pages 1-21, August.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:15:p:9752-:d:882905
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    References listed on IDEAS

    as
    1. Gianni Nicolini & Marlene Haupt, 2019. "The Assessment of Financial Literacy: New Evidence from Europe," IJFS, MDPI, vol. 7(3), pages 1-20, September.
    2. Amged Saleh Shkeer & Zainudin Awang, 2019. "Exploring the Items for Measuring the Marketing Information System Construct: An Exploratory Factor Analysis," International Review of Management and Marketing, Econjournals, vol. 9(6), pages 87-97.
    3. Nurul Shahnaz Mahdzan & Rozaimah Zainudin & Mohd Edil Abd. Sukor & Fauzi Zainir & Wan Marhaini Wan Ahmad, 2019. "Determinants of Subjective Financial Well-Being Across Three Different Household Income Groups in Malaysia," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 146(3), pages 699-726, December.
    4. Ananthan Munisamy & Sheerad Sahid & Muhammad Hussin, 2022. "Exploratory Factor and Reliability Analysis of Financial Literacy Instrument to Assess Low-Income Groups in Malaysia," Journal of Social Economics Research, Conscientia Beam, vol. 9(1), pages 39-51.
    5. N. Sawandi* & A. S Abu Bakar & H.Shaari & R. A. Saad & N. A. Amran, 2018. "Financial Literacy among Malaysian: Level of Financial Knowledge Score," The Journal of Social Sciences Research, Academic Research Publishing Group, pages 300-304:6.
    6. Rosseel, Yves, 2012. "lavaan: An R Package for Structural Equation Modeling," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 48(i02).
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Alaa Al-Hinai & Hemanatha Jayasuriya & Pankaj B. Pathare, 2022. "Development of Guidelines and Procedures for Value Addition to Improve Productivity and Sustainability: Case of Dates in Oman," Sustainability, MDPI, vol. 14(20), pages 1-14, October.

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    More about this item

    Keywords

    socioeconomic status; financial literacy; financial well-being; financial sustainability; low-income households; Malaysia B40 households;
    All these keywords.

    JEL classification:

    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General

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