Financial literacy and participation in the financial markets in Tanzania: An application of the logit regression model
Background: Financial market participation is explained from the viewpoint of financial literacy, awareness, investors’ risk aversion, and cost of stock market participation but could not be successful. As a result, households’ lack of participation in the stock market remains a puzzle across the wo...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
AOSIS
2021-03-01
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| Series: | Journal of Economic and Financial Sciences |
| Subjects: | |
| Online Access: | https://jefjournal.org.za/index.php/jef/article/view/545 |
| _version_ | 1818568860147646464 |
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| author | Manamba Epaphra Brenda P. Kiwia |
| author_facet | Manamba Epaphra Brenda P. Kiwia |
| author_sort | Manamba Epaphra |
| collection | DOAJ |
| description | Background: Financial market participation is explained from the viewpoint of financial literacy, awareness, investors’ risk aversion, and cost of stock market participation but could not be successful. As a result, households’ lack of participation in the stock market remains a puzzle across the world.
Aim: The paper examines the factors determining the participation of individuals in the financial markets using the logistic regression model. Categorical data covering a sample of 484 were collected from individuals residing in Arusha, Tanzania.
Conclusion: Male and married individuals, as well as people with financial knowledge have a better chance of investing in the financial market despite their education level. Other variables such as risk attitude and level of income play a significant role in influencing individuals’ participation in the financial markets. The policy implication of these results is that increasing training, awareness of the benefits and operations of the financial markets will result in people opting to participate in the financial market, which will, in turn, lead to increased trading of financial assets and hence create a ripple effect to the economy. |
| first_indexed | 2024-12-14T06:40:37Z |
| format | Article |
| id | doaj.art-0c0a82d2577943488b573434b7fb49e2 |
| institution | Directory Open Access Journal |
| issn | 1995-7076 2312-2803 |
| language | English |
| last_indexed | 2024-12-14T06:40:37Z |
| publishDate | 2021-03-01 |
| publisher | AOSIS |
| record_format | Article |
| series | Journal of Economic and Financial Sciences |
| spelling | doaj.art-0c0a82d2577943488b573434b7fb49e22022-12-21T23:13:14ZengAOSISJournal of Economic and Financial Sciences1995-70762312-28032021-03-01141e1e1310.4102/jef.v14i1.545430Financial literacy and participation in the financial markets in Tanzania: An application of the logit regression modelManamba Epaphra0Brenda P. Kiwia1Institute of Accountancy Arusha, ArushaInstitute of Accountancy Arusha, ArushaBackground: Financial market participation is explained from the viewpoint of financial literacy, awareness, investors’ risk aversion, and cost of stock market participation but could not be successful. As a result, households’ lack of participation in the stock market remains a puzzle across the world. Aim: The paper examines the factors determining the participation of individuals in the financial markets using the logistic regression model. Categorical data covering a sample of 484 were collected from individuals residing in Arusha, Tanzania. Conclusion: Male and married individuals, as well as people with financial knowledge have a better chance of investing in the financial market despite their education level. Other variables such as risk attitude and level of income play a significant role in influencing individuals’ participation in the financial markets. The policy implication of these results is that increasing training, awareness of the benefits and operations of the financial markets will result in people opting to participate in the financial market, which will, in turn, lead to increased trading of financial assets and hence create a ripple effect to the economy.https://jefjournal.org.za/index.php/jef/article/view/545financial literacyfinancial marketslogit modellingregression modeltanzanialiteracyfinancial marketslogit modellingregression modeltanzania |
| spellingShingle | Manamba Epaphra Brenda P. Kiwia Financial literacy and participation in the financial markets in Tanzania: An application of the logit regression model Journal of Economic and Financial Sciences financial literacy financial markets logit modelling regression model tanzanialiteracy financial markets logit modelling regression model tanzania |
| title | Financial literacy and participation in the financial markets in Tanzania: An application of the logit regression model |
| title_full | Financial literacy and participation in the financial markets in Tanzania: An application of the logit regression model |
| title_fullStr | Financial literacy and participation in the financial markets in Tanzania: An application of the logit regression model |
| title_full_unstemmed | Financial literacy and participation in the financial markets in Tanzania: An application of the logit regression model |
| title_short | Financial literacy and participation in the financial markets in Tanzania: An application of the logit regression model |
| title_sort | financial literacy and participation in the financial markets in tanzania an application of the logit regression model |
| topic | financial literacy financial markets logit modelling regression model tanzanialiteracy financial markets logit modelling regression model tanzania |
| url | https://jefjournal.org.za/index.php/jef/article/view/545 |
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