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Low numeracy is associated with poor financial well-being around the world

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  • Wändi Bruine de Bruin
  • Paul Slovic

Abstract

Numeracy refers to the ability to use numbers, including converting percentages (e.g., 10%) into absolute frequencies (e.g., 1 in 10). Studies have suggested that numeracy is correlated to financial outcomes, suggesting its relevance to financial decisions. However, almost all research on numeracy has been conducted in high-income countries in Europe and North America. Our analyses suggest that low numeracy is much more common in low-income countries, thus potentially threatening the financial well-being of the world’s poorest. We analyzed data from the Lloyd’s Register Foundation World Risk Poll, which assessed basic numeracy in 141 countries, including 21 low-income, 34 lower middle income, 43 upper middle income, and 43 high-income countries. Numeracy was associated with being among the poorest 20% of one’s country, and with difficulty living on one’s income, even after accounting for income, education, and demographics. These findings underscore the importance of worldwide numeracy education.

Suggested Citation

  • Wändi Bruine de Bruin & Paul Slovic, 2021. "Low numeracy is associated with poor financial well-being around the world," PLOS ONE, Public Library of Science, vol. 16(11), pages 1-15, November.
    • Handle: RePEc:plo:pone00:0260378
    DOI: 10.1371/journal.pone.0260378
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    1. Angela Fagerlin & Brian J. Zikmund-Fisher & Peter A. Ubel & Aleksandra Jankovic & Holly A. Derry & Dylan M. Smith, 2007. "Measuring Numeracy without a Math Test: Development of the Subjective Numeracy Scale," Medical Decision Making, , vol. 27(5), pages 672-680, September.
    2. Skagerlund, Kenny & Lind, Thérèse & Strömbäck, Camilla & Tinghög, Gustav & Västfjäll, Daniel, 2018. "Financial literacy and the role of numeracy–How individuals’ attitude and affinity with numbers influence financial literacy," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 74(C), pages 18-25.
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    1. Wändi Bruine de Bruin & Aulona Ulqinaku & Jimena Llopis & Matteo Santangelo Ravà, 2023. "Beyond High-Income Countries: Low Numeracy Is Associated with Older Adult Age around the World," Post-Print hal-04185867, HAL.
    2. Andie Storozuk & Erin A. Maloney, 2023. "What’s Math Got to Do with It?: Establishing Nuanced Relations between Math Anxiety, Financial Anxiety, and Financial Literacy," JRFM, MDPI, vol. 16(4), pages 1-27, April.

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