IDEAS home Printed from https://ideas.repec.org/p/zbw/esprep/251057.html
   My bibliography  Save this paper

Measuring Economic Competence of Youth with a Short Scale

Author

Listed:
  • Oberrauch, Luis
  • Kaiser, Tim
  • Seeber, Günther

Abstract

We present a 12-item scale measuring the cognitive component of economic competence and document the psychometric properties of the scale. Using a data set with more than 12,000 secondary school students in Germany, the scale shows high discriminatory power and covers a wide range of ability levels. Analyses of `Differential Item Functioning´ show no item bias across key demographic characteristics, and scores show meaningful associations with scores obtained from adjacent test instruments. Student-level correlates mirror estimates documented in earlier literature on economic and financial literacy as well as results relying on a more extensive scale with over 30 items. The presented short scale enables researchers and practitioners to efficiently measure economic competence of youth.

Suggested Citation

  • Oberrauch, Luis & Kaiser, Tim & Seeber, Günther, 2022. "Measuring Economic Competence of Youth with a Short Scale," EconStor Preprints 251057, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:251057
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/251057/1/OKS_2022.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Melanie Lührmann & Marta Serra-Garcia & Joachim Winter, 2018. "The Impact of Financial Education on Adolescents' Intertemporal Choices," American Economic Journal: Economic Policy, American Economic Association, vol. 10(3), pages 309-332, August.
    2. Eberle, Mira & Oberrauch, Luis, 2022. "What a difference three years of economics education make: Evidence from lower-track schools in Germany," EconStor Preprints 250909, ZBW - Leibniz Information Centre for Economics.
    3. Kaiser, Tim & Lusardi, Annamaria & Menkhoff, Lukas & Urban, Carly, 2022. "Financial education affects financial knowledge and downstream behaviors," Journal of Financial Economics, Elsevier, vol. 145(2), pages 255-272.
    4. Brocas, Isabelle & Carrillo, Juan D. & Combs, T. Dalton & Kodaverdian, Niree, 2019. "The development of consistent decision-making across economic domains," Games and Economic Behavior, Elsevier, vol. 116(C), pages 217-240.
    5. Sevon, Guje & Weckstrom, Sonja, 1989. "The development of reasoning about economic events: A study of Finnish children," Journal of Economic Psychology, Elsevier, vol. 10(4), pages 495-514.
    6. Grohmann, Antonia & Kouwenberg, Roy & Menkhoff, Lukas, 2015. "Childhood roots of financial literacy," Journal of Economic Psychology, Elsevier, vol. 51(C), pages 114-133.
    7. Miriam Bruhn & Luciana de Souza Leão & Arianna Legovini & Rogelio Marchetti & Bilal Zia, 2016. "The Impact of High School Financial Education: Evidence from a Large-Scale Evaluation in Brazil," American Economic Journal: Applied Economics, American Economic Association, vol. 8(4), pages 256-295, October.
    8. Furnham, Adrian & Bond, Michael, 1986. "Hong Kong Chinese explanations for wealth," Journal of Economic Psychology, Elsevier, vol. 7(4), pages 447-460, December.
    9. Andreoni, James & Di Girolamo, Amalia & List, John A. & Mackevicius, Claire & Samek, Anya, 2020. "Risk preferences of children and adolescents in relation to gender, cognitive skills, soft skills, and executive functions," Journal of Economic Behavior & Organization, Elsevier, vol. 179(C), pages 729-742.
    10. Annamaria Lusardi & Olivia S. Mitchell, 2014. "The Economic Importance of Financial Literacy: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 5-44, March.
    11. Oberrauch, Luis & Kaiser, Tim, 2020. "Economic competence in early secondary school: Evidence from a large-scale assessment in Germany," International Review of Economics Education, Elsevier, vol. 35(C).
    12. Bucciol, Alessandro & Quercia, Simone & Sconti, Alessia, 2021. "Promoting financial literacy among the elderly: Consequences on confidence," Journal of Economic Psychology, Elsevier, vol. 87(C).
    13. Darriet, Elisa & Guille, Marianne & Vergnaud, Jean-Christophe & Shimizu, Mariko, 2020. "Money illusion, financial literacy and numeracy: Experimental evidence," Journal of Economic Psychology, Elsevier, vol. 76(C).
    14. William B. Walstad & Ken Rebeck, 2008. "The Test of Understanding of College Economics," American Economic Review, American Economic Association, vol. 98(2), pages 547-551, May.
    15. Brocas, Isabelle & Carrillo, Juan D., 2020. "The evolution of choice and learning in the two-person beauty contest game from kindergarten to adulthood," Games and Economic Behavior, Elsevier, vol. 120(C), pages 132-143.
    16. Tim Kaiser & Luis Oberrauch & Günther Seeber, 2020. "Measuring economic competence of secondary school students in Germany," The Journal of Economic Education, Taylor & Francis Journals, vol. 51(3-4), pages 227-242, August.
    17. Justine S. Hastings & Brigitte C. Madrian & William L. Skimmyhorn, 2013. "Financial Literacy, Financial Education, and Economic Outcomes," Annual Review of Economics, Annual Reviews, vol. 5(1), pages 347-373, May.
    18. Balasubramnian, Bhanu & Sargent, Carol Springer, 2020. "Impact of inflated perceptions of financial literacy on financial decision making," Journal of Economic Psychology, Elsevier, vol. 80(C).
    19. Choshen-Hillel, Shoham & Lin, Zhenni & Shaw, Alex, 2020. "Children weigh equity and efficiency in making allocation decisions: Evidence from the US, Israel, and China," Journal of Economic Behavior & Organization, Elsevier, vol. 179(C), pages 702-714.
    20. Oberrauch, Luis & Seeber, Günther, 2021. "The impact of mandatory economic education on adolescents' attitudes," EconStor Preprints 232586, ZBW - Leibniz Information Centre for Economics.
    21. Leiser, David, 1983. "Children's conceptions of economics -- The constitution of a cognitive domain," Journal of Economic Psychology, Elsevier, vol. 4(4), pages 297-317, December.
    22. Kaiser, Tim & Oberrauch, Luis & Pang, Ming Fai & Seeber, Günther, 2021. "Using the ‘Test of Economic Competence’ with secondary school students in Hong Kong: Results and psychometric properties," EconStor Preprints 236205, ZBW - Leibniz Information Centre for Economics.
    23. Driva, Anastasia & Lührmann, Melanie & Winter, Joachim, 2016. "Gender differences and stereotypes in financial literacy: Off to an early start," Economics Letters, Elsevier, vol. 146(C), pages 143-146.
    24. Leiser, David & Beth Halachmi, Reut, 2006. "Children's understanding of market forces," Journal of Economic Psychology, Elsevier, vol. 27(1), pages 6-19, February.
    25. Sutter, Matthias & Zoller, Claudia & Glätzle-Rützler, Daniela, 2019. "Economic behavior of children and adolescents – A first survey of experimental economics results," European Economic Review, Elsevier, vol. 111(C), pages 98-121.
    26. Davies, Peter & Lundholm, Cecilia, 2012. "Students’ understanding of socio-economic phenomena: Conceptions about the free provision of goods and services," Journal of Economic Psychology, Elsevier, vol. 33(1), pages 79-89.
    27. William B. Walstad & Ken Rebeck & Roger B. Butters, 2013. "The Test of Economic Literacy: Development and Results," The Journal of Economic Education, Taylor & Francis Journals, vol. 44(3), pages 298-309, September.
    28. Kaiser, Tim & Oberrauch, Luis, 2021. "Economic education at the expense of indoctrination? Evidence from Germany," EconStor Preprints 245801, ZBW - Leibniz Information Centre for Economics.
    29. Isabelle Brocas & Juan D. Carrillo, 2021. "Steps of Reasoning in Children and Adolescents," Journal of Political Economy, University of Chicago Press, vol. 129(7), pages 2067-2111.
    30. Thomas Warm, 1989. "Weighted likelihood estimation of ability in item response theory," Psychometrika, Springer;The Psychometric Society, vol. 54(3), pages 427-450, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fred van Raaij, W. & Riitsalu, Leonore & Põder, Kaire, 2023. "Direct and indirect effects of self-control and future time perspective on financial well-being," Journal of Economic Psychology, Elsevier, vol. 99(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kaiser, Tim & Oberrauch, Luis, 2021. "Economic education at the expense of indoctrination? Evidence from Germany," EconStor Preprints 245801, ZBW - Leibniz Information Centre for Economics.
    2. Tim Kaiser & Luis Oberrauch & Günther Seeber, 2020. "Measuring economic competence of secondary school students in Germany," The Journal of Economic Education, Taylor & Francis Journals, vol. 51(3-4), pages 227-242, August.
    3. Oberrauch, Luis & Kaiser, Tim, 2020. "Economic competence in early secondary school: Evidence from a large-scale assessment in Germany," International Review of Economics Education, Elsevier, vol. 35(C).
    4. Alfonso, Antonio & Brañas-Garza, Pablo & Jorrat, Diego & Lomas, Pablo & Prissé, Benjamin & Vasco, Mónica & Vázquez-De Francisco, María J., 2023. "The adventure of running experiments with teenagers," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 106(C).
    5. Callis, Zoe & Gerrans, Paul & Walker, Dana L. & Gignac, Gilles E., 2023. "The association between intelligence and financial literacy: A conceptual and meta-analytic review," Intelligence, Elsevier, vol. 100(C).
    6. Kaiser, Tim & Menkhoff, Lukas, 2022. "Active learning improves financial education: Experimental evidence from Uganda," Journal of Development Economics, Elsevier, vol. 157(C).
    7. Bucciol, Alessandro & Quercia, Simone & Sconti, Alessia, 2021. "Promoting financial literacy among the elderly: Consequences on confidence," Journal of Economic Psychology, Elsevier, vol. 87(C).
    8. Lusardi, Annamaria & Kaiser, Tim, 2024. "Financial literacy and financial education: An overview," CEPR Discussion Papers 19185, C.E.P.R. Discussion Papers.
    9. Lusardi, Annamaria & Kaiser, Tim, 2024. "Financial literacy and financial education: An overview," CEPR Discussion Papers 19185, C.E.P.R. Discussion Papers.
    10. Tim Kaiser & Lukas Menkhoff, 2017. "Does Financial Education Impact Financial Literacy and Financial Behavior, and If So, When?," The World Bank Economic Review, World Bank, vol. 31(3), pages 611-630.
    11. Kaiser, Tim & Lusardi, Annamaria & Menkhoff, Lukas & Urban, Carly, 2022. "Financial education affects financial knowledge and downstream behaviors," Journal of Financial Economics, Elsevier, vol. 145(2), pages 255-272.
    12. Kaiser, Tim & Menkhoff, Lukas, 2020. "Financial education in schools: A meta-analysis of experimental studies," Economics of Education Review, Elsevier, vol. 78(C).
    13. Bannier, Christina E. & Schwarz, Milena, 2018. "Gender- and education-related effects of financial literacy and confidence on financial wealth," Journal of Economic Psychology, Elsevier, vol. 67(C), pages 66-86.
    14. Kaiser, Tim & Menkhoff, Lukas, 2018. "Active Learning Improves Financial Education:," Rationality and Competition Discussion Paper Series 131, CRC TRR 190 Rationality and Competition.
    15. Tabea Bucher-Koenen & Rob Alessie & Annamaria Lusardi & Maarten van Rooij, 2021. "Fearless Woman. Financial Literacy and Stock Market Participation," Working Papers 708, DNB.
    16. Brocas, Isabelle & Carrillo, Juan D., 2022. "Adverse selection and contingent reasoning in preadolescents and teenagers," Games and Economic Behavior, Elsevier, vol. 133(C), pages 331-351.
    17. Giovanni Gallo & Alessia sconti, 2023. "Could financial education be a universal social policy? A simulation of potential influences on inequality levels," Center for the Analysis of Public Policies (CAPP) 0182, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
    18. Cziriak, Marius & Bucher-Koenen, Tabea & Alessie, Rob, 2024. "Beyond knowledge: Confidence and the Gender Gap in Financial Literacy," VfS Annual Conference 2024 (Berlin): Upcoming Labor Market Challenges 302421, Verein für Socialpolitik / German Economic Association.
    19. Tim Kaiser & Lukas Menkhoff, 2018. "Active Learning Fosters Financial Behavior: Experimental Evidence," Discussion Papers of DIW Berlin 1743, DIW Berlin, German Institute for Economic Research.
    20. Maldonado, Joana Elisa & De Witte, Kristof, 2021. "The impact of information provision to parents: Experimental evidence on student outcomes," Journal of Behavioral and Experimental Finance, Elsevier, vol. 31(C).

    More about this item

    Keywords

    economic competence; economic literacy; IRT; measurement;
    All these keywords.

    JEL classification:

    • A21 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Pre-college
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • G53 - Financial Economics - - Household Finance - - - Financial Literacy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:esprep:251057. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zbwkide.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.