Research

24 pages, 901 KiB

Open AccessArticle

The Paradox of the Payday Borrower: A Case Study of the Role of Planned Behavior in Borrowers’ Motivations and Experiences

by Irene Herremans, Peggy Hedges, Fereshteh Mahmoudian, Anne Kleffner and Mahrukh Tahir

J. Risk Financial Manag. 2023, 16(5), 254; https://doi.org/10.3390/jrfm16050254 - 23 Apr 2023

Cited by 1 | Viewed by 1242

Abstract

This research used the theory of planned behavior as a framework to investigate the role of attitudes, behavioral control, norms, and previous behavior in payday loan borrowers’ difficulty or lack of difficulty in repaying loans. The data were collected from 138 respondents with [...] Read more.

This research used the theory of planned behavior as a framework to investigate the role of attitudes, behavioral control, norms, and previous behavior in payday loan borrowers’ difficulty or lack of difficulty in repaying loans. The data were collected from 138 respondents with payday loan experience via a questionnaire in a city in a western province in Canada as part of a campaign to change payday loan regulations. The research findings show that different approaches are necessary to address the needs of distinct types of payday borrowers, based on their repayment abilities and whether the loan improved their quality of life in the long term. Furthermore, we found, similar to previous literature, a group of payday borrowers who lack financial confidence. This sub-group is referred to as the “unsure” sub-group in our research and provides opportunities to improve the payday learning context. To accommodate the unsure group, payday lenders and conventional financial institutions can collaborate to offer innovative financial instruments, improve financial literacy through education, and provide better access to information about borrowers’ financial status. The confirmation of this unsure group also leads us to recommend further study to determine opportunities for payday borrowers to become better informed about their options, to increase financial confidence. Full article

(This article belongs to the Special Issue Financial and Economic Literacy—Implications for Education)

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27 pages, 689 KiB

Open AccessArticle

What’s Math Got to Do with It?: Establishing Nuanced Relations between Math Anxiety, Financial Anxiety, and Financial Literacy

by Andie Storozuk and Erin A. Maloney

J. Risk Financial Manag. 2023, 16(4), 238; https://doi.org/10.3390/jrfm16040238 - 12 Apr 2023

Cited by 1 | Viewed by 2145

Abstract

We investigate the relations between math anxiety, financial anxiety, and financial literacy while extending previous research in three ways. First, we examine the distinct subconstructs that comprise financial literacy (i.e., financial knowledge, confidence, attitudes, and behaviour). Second, we distinguish between financial knowledge items [...] Read more.

We investigate the relations between math anxiety, financial anxiety, and financial literacy while extending previous research in three ways. First, we examine the distinct subconstructs that comprise financial literacy (i.e., financial knowledge, confidence, attitudes, and behaviour). Second, we distinguish between financial knowledge items that are confounded with numeracy versus items that are not. Third, we control for trait anxiety. Using survey data from Canadian adults (N = 241), we demonstrate that math anxiety is negatively related to mathematical financial knowledge but is not related to conceptual financial knowledge, financial confidence, or financial behaviour. Financial anxiety, conversely, is negatively related to both mathematical and conceptual financial knowledge, financial confidence, and ideal financial behaviour. Our data suggest that, when considering financial literacy holistically, financial anxiety is more important than previously thought. These findings highlight the importance of distinguishing between the subconstructs that comprise financial literacy when attempting to understand individual differences that relate to financial literacy. Educators and policymakers looking to improve financial literacy would seemingly benefit from employing a targeted approach to decrease anxiety toward both math and finances. Full article

(This article belongs to the Special Issue Financial and Economic Literacy—Implications for Education)

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28 pages, 1037 KiB

Open AccessArticle

Measurement of Financial Competence—Designing a Complex Framework Model for a Complex Assessment Instrument

by Andreas Kraitzek and Manuel Förster

J. Risk Financial Manag. 2023, 16(4), 223; https://doi.org/10.3390/jrfm16040223 - 03 Apr 2023

Viewed by 2991

Abstract

Financial competence is seen as a complex ability necessary for people to deal with personal financial issues on a daily basis. To foster young peoples’ financial competence via sophisticated and tailored educational programs, the identification of “competence gaps” through complex and authentic assessments [...] Read more.

Financial competence is seen as a complex ability necessary for people to deal with personal financial issues on a daily basis. To foster young peoples’ financial competence via sophisticated and tailored educational programs, the identification of “competence gaps” through complex and authentic assessments is required. While a large number of assessment tools in the field of personal finance already exist, many of them suffer from different shortcomings concerning a competence-oriented approach. Therefore, we present an innovative way to assess students’ financial competence with a complex performance scenario about financial investment. The presented instrument is built on a specifically designed theoretical framework and addresses the need for holistic financial competence measurement. Results of pretesting trials indicate that the instrument is generally capable of measuring young learners’ financial competence, but challenges in scoring remain. Against this background, implications for the instrument’s iterative enhancement are presented and discussed with reference to validity and reliability properties, scoring issues, and statements about the overall feasibility of complex performance tasks in educational settings. The first draft of a scoring scheme is provided. The potential of the instrument in combination with modern technology-based measurement methods (eye tracking, emotion recognition) for competence assessment is described and suggestions for further research are outlined. Full article

(This article belongs to the Special Issue Financial and Economic Literacy—Implications for Education)

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14 pages, 1483 KiB

Open AccessArticle

Evaluating the Visual Metaphors of Financial Concepts through Content Analysis

by Awais Malik

J. Risk Financial Manag. 2023, 16(3), 202; https://doi.org/10.3390/jrfm16030202 - 15 Mar 2023

Cited by 1 | Viewed by 1961

Abstract

Adding pictures to instructional materials that are relevant and representational supports meaningful learning. However, it is not always straightforward to generate such pictures, for example, for abstract concepts. It is much easier to make representational pictures of concrete concepts, “table” or “chair”, compared [...] Read more.

Adding pictures to instructional materials that are relevant and representational supports meaningful learning. However, it is not always straightforward to generate such pictures, for example, for abstract concepts. It is much easier to make representational pictures of concrete concepts, “table” or “chair”, compared to abstract concepts, “loyalty” or “democracy”. The field of finance is full of abstract or complex financial concepts, such as pension, market value, and asset valuation—to name a few. How do we then make pictures of such financial concepts that can represent them? In this regard, visual metaphors could provide hints as to how complex financial concepts can be presented in the form of pictures. For this purpose, this study analyzed the representation of complex financial concepts in terms of visual metaphors. Visual metaphors of five financial concepts were selected from the financial learning content online. These included: (1) risk diversification, (2) inflation, (3) compound interest, (4) time value of money, and (5) financial risk. Using the content analysis approach, each of the visual metaphors were analyzed to determine how different features of the given financial concept were mapped onto the visual metaphor, making them representational. Results indicate that visual metaphors could be an effective and creative way to present complex financial concepts in the form of representational pictures. Full article

(This article belongs to the Special Issue Financial and Economic Literacy—Implications for Education)

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21 pages, 582 KiB

Open AccessArticle

Challenges in Understanding Western Economic and Financial Concepts from the Perspective of Young Adults with a Post-Soviet Migration Background in Germany—Findings from a Qualitative Interview Study

by Sebastian Heidel and Roland Happ

J. Risk Financial Manag. 2023, 16(3), 165; https://doi.org/10.3390/jrfm16030165 - 01 Mar 2023

Viewed by 2086

Abstract

The content of economic education in Germany is based largely on the laws and ideals of the prevailing economic system. While Western concepts such as the competitive market typically are addressed in economic programs in Germany, they may be unfamiliar in Eastern European [...] Read more.

The content of economic education in Germany is based largely on the laws and ideals of the prevailing economic system. While Western concepts such as the competitive market typically are addressed in economic programs in Germany, they may be unfamiliar in Eastern European countries that were part of, or under the influence of, the former Soviet Union, where many youths living in Germany originate. Findings from large-scale quantitative studies of economic and financial literacy in Germany indicate that people who have a migration background (MB) perform worse on tests of economic literacy than those who do not; however, these studies do not provide sufficient insight into the underlying migration-related causes of the deficits in economic literacy. In this study we investigate the influence of family financial socialization on young adults’ understanding of economic and financial concepts. We interview eight young adults with a post-Soviet MB living in Germany using a two-part procedure: problem-centered and think-aloud interviews. We found that migrant parents directly and indirectly influenced their children’s understanding of economic and financial concepts in numerous ways, and we maintain that the best way to remedy the deficits in their understanding of such concepts is through targeted programs and teacher training. Full article

(This article belongs to the Special Issue Financial and Economic Literacy—Implications for Education)

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14 pages, 305 KiB

Open AccessArticle

How Gender and Primary Language Influence the Acquisition of Economic Knowledge of Secondary School Students in the United States and Germany

by Roland Happ, Susanne Schmidt, Olga Zlatkin-Troitschanskaia and William Walstad

J. Risk Financial Manag. 2023, 16(3), 160; https://doi.org/10.3390/jrfm16030160 - 01 Mar 2023

Viewed by 991

Abstract

Economics has become an essential component of secondary school curricula in many countries as a result of the growing awareness that young adults need fundamental economic knowledge to manage their personal finances. Accordingly, an increasing number of comparative studies are being conducted of [...] Read more.

Economics has become an essential component of secondary school curricula in many countries as a result of the growing awareness that young adults need fundamental economic knowledge to manage their personal finances. Accordingly, an increasing number of comparative studies are being conducted of commonalities and differences in students’ economic knowledge and its most decisive influencing factors within and across countries. In this study, we compare the performance of secondary school students in the United States (N = 3517) and Germany (N = 983) on the fourth version of the Test of Economic Literacy. We investigate two personal characteristics that have been found to influence the students’ acquisition of economic knowledge: gender and primary language. Although these two characteristics have been considered in numerous studies of economic education in both countries, they have not been investigated together in an international comparison, which would allow more effective pedagogical approaches for economic education to be formulated. We found male students in both countries exhibited greater economic knowledge, and students whose primary language was the same as the national language performed better. We discuss implications for economic education in both countries and cross-nationally. Full article

(This article belongs to the Special Issue Financial and Economic Literacy—Implications for Education)

28 pages, 1044 KiB

Open AccessArticle

Choosing a Business or Economics Study Program at University: The Role of the Economics Teacher

by Michael Jüttler and Stephan Schumann

J. Risk Financial Manag. 2022, 15(11), 522; https://doi.org/10.3390/jrfm15110522 - 08 Nov 2022

Viewed by 1877

Abstract

The choice of a study program is based on complex individual decision-making processes. Thereby, economics is one of the most popular fields of study worldwide. Considering previous studies, the role of the teacher is often neglected. However, it can be assumed that teachers’ [...] Read more.

The choice of a study program is based on complex individual decision-making processes. Thereby, economics is one of the most popular fields of study worldwide. Considering previous studies, the role of the teacher is often neglected. However, it can be assumed that teachers’ professional knowledge plays a significant role in a student’s choice of a study program. Thus, the present study investigated the influence of the professional knowledge that students perceive in their economics teacher on their aspirations and choice of an economics study program. The longitudinal data of 1387 Swiss high school students were analyzed. Economic competencies were measured multidimensionally and included knowledge, motivation, interest, value-oriented dispositions, and attitude. There were small to moderate correlations between the professional knowledge that students perceived in their economics teacher and their economic competencies. With regard to the intention and choice of economics, the results show small to moderate effects of the pedagogic content knowledge and the general pedagogic knowledge that students perceive in their teacher. These findings contribute to the discussion on the role of the economics teacher. It is therefore recommended that the teaching professionalism of economics teachers, which has been criticized in different countries, be promoted more strongly and more systematically. Full article

(This article belongs to the Special Issue Financial and Economic Literacy—Implications for Education)

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17 pages, 3449 KiB

Open AccessArticle

Financial Literacy of Adults in Germany FILSA Study Results

by Michael Schuhen, Susanne Kollmann, Minou Seitz, Gunnar Mau and Manuel Froitzheim

J. Risk Financial Manag. 2022, 15(11), 488; https://doi.org/10.3390/jrfm15110488 - 22 Oct 2022

Cited by 3 | Viewed by 2398

Abstract

The steady growing of online financial services due to the vanishing of on-site banking offers is changing the socio-economic framework individuals make financial decisions in. Financial literacy as an essential part of basic education is therefore also subject to changes. In order to [...] Read more.

The steady growing of online financial services due to the vanishing of on-site banking offers is changing the socio-economic framework individuals make financial decisions in. Financial literacy as an essential part of basic education is therefore also subject to changes. In order to investigate the individual competence of the respondents with regard to financially determined life situations, a digital questionnaire survey with integrated simulation sequences was conducted. For this purpose, a testing instrument (FILSA—Financial Literacy Study of Adults) has been developed to measure the financial literacy of adults. The validity of the construct including its five content areas was tested and the relationships between the manifest exogenous variables and financial literacy were mapped in a structural equation model. It introduces the participants (N = 212) to various financial problems and offers specific aids for founded decision-making. The study’s evaluation system takes into account the participants’ individual behavior in three case studies as well as the impact of attitude and socio-demographic factors on their decisions and behaviors, such as gender, age, and their degree of internet affinity. FILSA examines how adults make decisions with regard to finances and what benefit or impact online tools and financial advisors have on the decision-making process. Furthermore, it is possible to develop concepts for self-learning that are comprised in online tools for decision-making. Full article

(This article belongs to the Special Issue Financial and Economic Literacy—Implications for Education)

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