Ask a Question and Get an Answer: a Study of the Framing Effect on Financial Literacy in Italy

This paper takes its cue from the relevance of the framing effect related to behavioral biases associated with economic decision-making. Most attempts to measure financial literacy rely on surveys that include standardized multiple-choice questions. We aim to detect the distortive effect, if any, of the standard questionnaire on the measurement of the level of financial literacy that results from the way questions are expressed. A survey conducted in October 2021 involving 2,500 individuals representative of the Italian population—the worst performer in financial literacy among the G7 countries—made it possible to evaluate whether questions with alternative wording created higher respondent engagement, determined other answers, and improved performance. The descriptive and regression analysis showed that the wording effect mattered in three out of four questions. More engaging words mitigated the gender effect by reducing the probability of women choosing the “I do not know” option. However, while there was evidence of an increase in the percentage of correct answers to individual questions, the overall financial literacy level showed no improvement. The regression analysis found that the likelihood of being financially literate, independently of the type of question, significantly depended on sociodemographic variables (gender, age, geographical area, and level of education) and self-evaluation of digital and economic skills. In addition, knowledge of basic math played a key role. Those who know how to calculate a percentage correctly had a notably higher probability of being financially literate. This evidence has clear policy implications since it highlights the necessity of investing in digital and math education to fill gender and intergenerational literacy gaps.