nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2022‒02‒28
five papers chosen by

  1. Culture, Gender, and Financial Literacy By Davoli, Maddalena; Rodríguez-Planas, Núria
  2. Does financial innovation enhance financial deepening and growth in Kenya? By Misati, Roseline Nyakerario; Osoro, Jared; Odongo, Maureen
  3. Interventions to reverse the trend towards light-duty trucks in canada By Verena Gruber; Ingrid Peignier; Elinora Pentcheva; Anshu Suri
  4. Republic of Moldova: Technical Assistance Report-Financial Sector Stability Review By International Monetary Fund
  5. Inclusive Growth in Sub-Saharan Africa: Exploring the Interaction Between ICT Diffusion and Financial Development By Ofori, Isaac K.; Osei, Dennis B.; Alagidede, Imhotep P.

  1. By: Davoli, Maddalena (Goethe University Frankfurt); Rodríguez-Planas, Núria (Queens College, CUNY)
    Abstract: Using a nationally representative US sample of 9,623 adults from 27 countries of ancestries, we find that the higher the degree of gender convergence in financial knowledge in the country of ancestry, the higher the financial knowledge of women in the US relative to their male counterparts. After ruling out gender differences in cognitive and non-cognitive skills as potential mechanisms, we find that higher patience and lower altruism in the country of ancestry are associated with greater financial knowledge for men but not for women in the US. Once we remove any country-of-ancestry gender variation from these preferences, gender convergence in financial knowledge continues to be associated with women's (relative and absolute) greater financial literacy in the US, underscoring that gender differences in financial literacy are socially constructed. This relative and absolute female improvement is particularly robust for knowledge related to inflation and risk-diversification.
    Keywords: financial literacy, gender, epidemiological approach, and preferences
    JEL: D1 J16 G53 Z10
    Date: 2022–01
  2. By: Misati, Roseline Nyakerario; Osoro, Jared; Odongo, Maureen
    Abstract: This study examined the implication of financial innovation on financial depth and economic growth in Kenya using quarterly data covering the period 2009 to 2020. Based on autoregressive distributive lag models, we demonstrate a positive relationship between financial innovation and financial depth with the strongest impact emanating from internet usage and mobile financial services and the lowest impact from the number of bank branches and automated teller machines. The results also further reveal a significant positive impact of financial depth on economic growth consistent with the supply-leading finance theory. The study recommends investment in technology-enabling infrastructure for digital financial services, design strategies to ensure affordability of mobile devices and prioritisation of financial literacy to bridge the gap between people and technology.
    Keywords: Financial Innovation,Financial Depth,Growth
    Date: 2021
  3. By: Verena Gruber; Ingrid Peignier; Elinora Pentcheva; Anshu Suri
    Abstract: The primary objective of this report was to investigate the effectiveness of different messages to mitigate the liking and purchase of energy-intensive vehicles, particularly sport utility vehicles (SUVs). It presents the results of four experimental studies on both topics relevant to policymakers (i.e., regulating price presentation and working on financial empowerment initiatives to increase citizens' numerical and financial literacy) and topics that can be leveraged in social marketing campaigns to help reverse the trend toward energy-intensive vehicles. Specifically, three experiments testing aspects of personal identity, social norms, and time orientation find the following: • Creating negative perceptions of SUV drivers as people with below-average driving skills significantly reduces both appreciation of SUVs and intention to purchase an SUV, regardless of whether the individual already owns a gas-guzzling vehicle. • Changing the social norm around SUVs: SUVs have become a social norm as they were the top selling vehicle in Canada in 2020, and the literature in the field clearly demonstrates the importance of social norms in influencing consumer decision-making. Our results show that these norms can also be used to counter the trend toward gas-guzzlers by emphasizing that compact cars are the normal vehicle to choose. • Get the public to think about the legacy left to their children by purchasing a light truck using time-based cues: highlighting a future orientation decreases the liking and intention to purchase energy-intensive vehicles. The intervention is particularly effective for individuals who already recognize the environmental impact of personal transport. • Building individual capacity to consider all vehicle costs: We find that while individuals are generally able to stay within their budgets, those with low levels of numerical and financial literacy, as well as those who are financially dissatisfied (regardless of their level of literacy), make many more choices that exceed their budgets. This experience underscores the importance of initiatives to improve financial literacy, as particularly vulnerable consumers appear to be attracted to SUV purchases. The research documented in this second report builds directly on the results of the exploratory phase documented in the CIRANO 2021RP-06 project report which assessed the motivations, attitudes and contextual factors influencing vehicle choices among Canadians and empirically tests the effectiveness of different messages in addressing the trend towards fuel-inefficient vehicles in Canada. L'objectif principal de ce rapport était d'étudier l'efficacité de différents messages visant à atténuer le goût et l'achat de véhicules à forte consommation d'énergie, en particulier les véhicules utilitaires sport (VUS). Il présente les résultats de quatre études expérimentales portant à la fois sur des thèmes pertinents pour les décideurs politiques (c'est-à-dire réglementer la présentation des prix et travailler sur des initiatives de renforcement des capacités financières afin de renforcer les connaissances numériques et financières des citoyens) et sur des thèmes qui peuvent être exploités dans des campagnes de marketing social pour aider à inverser la tendance vers des véhicules à forte consommation d'énergie. Plus précisément, trois expériences testant des aspects de l'identité personnelle, des normes sociales et de l'orientation temporelle permettent de constater ce qui suit : • Créer des perceptions négatives des conducteurs de SUV en tant que personnes ayant des compétences de conduite inférieures à la moyenne contribue à réduire de manière significative à la fois l'appréciation des VUS et l'intention d'acheter un VUS, indépendamment du fait que la personne possède déjà un véhicule énergivore ou non. • Changer la norme sociale autour des VUS : Les VUS sont devenus une norme sociale de facto puisqu'ils étaient les véhicules les plus vendus au Canada en 2020, et la littérature dans le domaine démontre clairement l'importance des normes sociales pour influencer la prise de décision des consommateurs. Nos résultats montrent que ces normes peuvent également être utilisées pour contrer la tendance aux véhicules énergivores en soulignant que les voitures de taille compacte sont le véhicule normal à choisir. • Amener le public a? re?fle?chir a? l’he?ritage laisse? a? ses enfants en achetant un camion le?ger a? l’aide de repe?res temporels : le fait de faire ressortir une orientation vers l'avenir permet de diminuer le goût et l'intention d'achat de véhicules à forte consommation d'énergie. L'intervention est particulièrement efficace pour les individus qui reconnaissent déjà l'effet du transport individuel sur l'environnement. • Renforcer les capacite?s individuelles a? tenir compte de tous les cou?ts associe?s aux ve?hicules : Nous constatons que, si les individus sont généralement capables de respecter leur budget, ceux qui ont un faible niveau de compétences numériques et financières, ainsi que ceux qui sont financièrement insatisfaits (indépendamment de leur niveau de compétences), font beaucoup plus de choix qui dépassent leur budget. Cette expérience souligne l'importance des initiatives visant à améliorer les compétences financières, car les consommateurs particulièrement vulnérables semblent être attirés par l'achat de VUS. La recherche documentée dans ce deuxième rapport s'appuie directement sur les résultats de la phase exploratoire documentés dans le rapport de projet CIRANO 2021RP-06 qui a évalué les motivations, les attitudes et les facteurs contextuels influençant les choix de véhicules chez les Canadiens et teste empiriquement l'efficacité de différents messages pour contrer la tendance à l'utilisation de véhicules énergivores au Canada.
    Keywords: SUVs,Light trucks,Experimental economics,Consumer behavior,Social marketing, VUS,Camions légers,Ãconomie expérimentale,Comportement du consommateur,marketing social
    JEL: C91 M31 M38 Q5 R4
    Date: 2021–12–23
  4. By: International Monetary Fund
    Abstract: The mission conducted a diagnostic review of the financial system and proposes a Technical Assistance Roadmap (TARM) to support the authorities’ efforts to strengthen their detection of risks and vulnerabilities and to enhance capacity in financial sector oversight and development. Two modules were undertaken during this FSSR mission. The financial stability module focused on areas agreed with the NBM and NCFM during the scoping stage: financial sector oversight, financial stability (macroprudential framework, systemic risk assessment, and stress testing), financial crisis management, financial inclusion and capital markets development. The financial sector statistics module focused on key data gaps hampering financial stability analysis as well as statistical reporting to the IMF’s Statistics Department.
    Date: 2022–02–07
  5. By: Ofori, Isaac K.; Osei, Dennis B.; Alagidede, Imhotep P.
    Abstract: Despite the momentous rise in ICT diffusion, and financial development in sub-Saharan Africa (SSA), their plausible joint effect on inclusive growth have not been explored, leaving a lacuna in the literature. This study, therefore, examines the direct and indirect effects of ICT diffusion on inclusive growth in 42 SSA countries over the period 1980–2019. We provide evidence robust to several specifications from the dynamic system GMM to show that: (i) ICT skills, access and usage induce inclusive growth in SSA, and (ii) the effects of ICT skills, access and usage are enhanced in the presence of financial development. These findings remain the same when we focussed on financial institution access. Policy recommendations are provided in line with the region’s green growth agenda and striving efforts at improving socioeconomic development.
    Keywords: Financial Development; Financial Inclusion; ICT Diffusion; Inequality; Inclusive Growth; Poverty; Sub-Saharan Africa
    JEL: D63 E5 G2 I3 L96 O11 O55
    Date: 2022–02–07

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.