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Financial behavior, confidence, risk preferences and financial literacy of university students

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  • Calvin Mudzingiri
  • John W. Muteba Mwamba
  • Jacobus Nicolaas Keyser

Abstract

This study investigates determinants of financial behavior (FB) of university students at a university in South Africa. It examines whether financial behavior, confidence, time preferences, risk preferences and financial literacy perceptions of university students differ by financial literacy level. Data were gathered via a questionnaire that included personal information, FB, financial perceptions and financial knowledge responses as well as a multiple price list (MPL) risk preferences and time preferences experiment tasks. A convenient total sample of 191 students (females = 53%) participated in the study. A t-test analysis showed that FB, risk preferences, confidence levels, time preferences and financial literacy perceptions of university students significantly differed by financial literacy level. Our results show that university students with low financial literacy levels are more overconfident, risk loving and impatient; such FB is synonymous with major causes of financial crises across the world. An OLS regression model analysis showed that the risk preferences index, financial literacy perception index and confidence significantly influenced the FB of categorized university students. The risk preference index significantly influenced debt FB of categorized university students. In order to understand the FB of university students, one should take cognizance of their preferences, financial knowledge, confidence and personal characteristics.

Suggested Citation

  • Calvin Mudzingiri & John W. Muteba Mwamba & Jacobus Nicolaas Keyser, 2018. "Financial behavior, confidence, risk preferences and financial literacy of university students," Cogent Economics & Finance, Taylor & Francis Journals, vol. 6(1), pages 1512366-151, January.
    • Handle: RePEc:taf:oaefxx:v:6:y:2018:i:1:p:1512366
    DOI: 10.1080/23322039.2018.1512366
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    Cited by:

    1. Calvin Mudzingiri, 2024. "The Effect of Financial Literacy Confidence on Financial Risk Preference Confidence. A Lab Experiment Approach," SAGE Open, , vol. 14(2), pages 21582440241, May.
    2. Rogelia Danica Español & Joemar T. Miñoza & Leo Zosa, 2024. "Financial literacy and entrepreneurial behavior of Junior high school students: Basis for TLE management plan," HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE - ECONOMICS AND BUSINESS ADMINISTRATION, HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE, HO CHI MINH CITY OPEN UNIVERSITY, vol. 14(4), pages 3-19.
    3. Paula Sarabando & Roge rio Matias & Pedro Vasconcelos & Tiago Miguel, 2023. "Financial literacy of Portuguese undergraduate students in polytechnics: does the area of the course influence financial literacy?," Journal of Economic Analysis, Anser Press, vol. 2(2), pages 96-113, April.
    4. Sheza Riaz & Hadi Hassan Khan & Bilal Sarwar & Wahab Ahmed & Noor Muhammad & Sajjida Reza & Sheikh Muhammad Nabeel Ul Haq, 2022. "Influence of Financial Social Agents and Attitude Toward Money on Financial Literacy: The Mediating Role of Financial Self-Efficacy and Moderating Role of Mindfulness," SAGE Open, , vol. 12(3), pages 21582440221, August.
    5. Jasmina Okicic & Meldina Kokorovic Jukan & Mensur Heric, 2021. "Some Insights Into Financial Literacy Among Undergraduate Students: A Case of Bosnia and Herzegovina," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 12(3), pages 103-115, May.

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