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Characterizing Financial and Statistical Literacy

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  • Amalia Di Girolamo
  • Glenn W. Harrison
  • Morten I. Lau
  • J. Todd Swarthout

Abstract

We characterize the literacy of an individual in a domain by their elicited subjective belief distribution over the possible responses to a question posed in that domain. We consider literacy across several financial, economic and statistical domains. We find considerable demographic heterogeneity in the degree of literacy. We also characterize the degree of consistency within a sample about their knowledge, even when that knowledge is imperfect. We show how uncertainty aversion might be a normatively attractive behavior for individuals who have imperfect literacy. Finally, we discuss extensions of our approach to characterize financial capability, the consequences of non-literacy, social literacy, and the information content of hypothetical survey measures of literacy.

Suggested Citation

  • Amalia Di Girolamo & Glenn W. Harrison & Morten I. Lau & J. Todd Swarthout, 2013. "Characterizing Financial and Statistical Literacy," Experimental Economics Center Working Paper Series 2013-04, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
    • Handle: RePEc:exc:wpaper:2013-04
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    References listed on IDEAS

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    3. Saima Ghazal & Edward T. Cokely & Rocio Garcia-Retamero, 2014. "Predicting biases in very highly educated samples: Numeracy and metacognition," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 9(1), pages 15-34, January.

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