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Financial Literacy and Risk-Taking of Households in the Hungarian Central Great Plain

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  • Botos, Katalin
  • Botos, József
  • Béres, Dániel
  • Csernák, József
  • Németh, Erzsébet

Abstract

The intense innovational activity typical of the financial sector in the last 30 years requires households to have increas-ingly comprehensive and complex financial knowledge. The main objective of our study, therefore, was to assess and evaluate risk management activity, which is an integral part of financial literacy, using the questionnaire survey focusing on households of the Central Great Plain and conducted by the Kossuth College of Lakitelek as basis. We have determined that the households examined are conservative with respect to their finances and strive to minimise risks as much as possible, which is commendable. Unfortunately, however, they lack the financial knowledge to make prudent decisions. In truth, risk management strategy based on inadequate knowledge, but thought to be sound is nothing more than a substitution of risk types, the significance of which house-holds are unable to assess realistically as they lack necessary financial knowledge.

Suggested Citation

  • Botos, Katalin & Botos, József & Béres, Dániel & Csernák, József & Németh, Erzsébet, 2012. "Financial Literacy and Risk-Taking of Households in the Hungarian Central Great Plain," Public Finance Quarterly, Corvinus University of Budapest, vol. 57(3), pages 267-285.
    • Handle: RePEc:pfq:journl:v:57:y:2012:i:3:p:267-285
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    File URL: https://unipub.lib.uni-corvinus.hu/8977/
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    References listed on IDEAS

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    1. Diana J. Beal & Sarath B. Delpachitra, 2003. "Financial Literacy Among Australian University Students," Economic Papers, The Economic Society of Australia, vol. 22(1), pages 65-78, March.
    2. Angela Hung & Andrew Parker & Joanne K. Yoong, 2009. "Defining and Measuring Financial Literacy," Working Papers 708, RAND Corporation.
    3. Angela A. Hung & Andrew M. Parker & Joanne K. Yoong, 2009. "Defining and Measuring Financial Literacy," Working Papers WR-708, RAND Corporation.
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    Cited by:

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    2. Baranyi, Aranka & Lliebmann, Lajos & Holló, Ervin, 2015. "Opportunities And Limitations In The Management Of Alternative Energy," Journal of Central European Green Innovation, Karoly Robert University College, vol. 3(Thematic ), pages 1-21.
    3. Szafrańska Monika, 2019. "Level of Financial Literacy of Academic Youth from Rural Areas in the Visegrad Group Countries," Financial Sciences. Nauki o Finansach, Sciendo, vol. 24(3), pages 46-58, September.

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    More about this item

    Keywords

    financial literacy; risk; risk management; Central Great Plain;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D69 - Microeconomics - - Welfare Economics - - - Other
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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