Financial Literacy and Household Savings in Romania
We present new evidence from the Euro Survey of the Austrian Central Bank on the level of financial literacy in Romania and analyze how financial literacy is related to household savings. Less than 5% of respondents were able to correctly answer the three “core” financial literacy questions on inter...
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| Format: | Article |
| Language: | English |
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National Numeracy Network
2013-07-01
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| Series: | Numeracy |
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| Online Access: | http://scholarcommons.usf.edu/numeracy/vol6/iss2/art9/ |
| _version_ | 1819081185906655232 |
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| author | Elisabeth Beckmann |
| author_facet | Elisabeth Beckmann |
| author_sort | Elisabeth Beckmann |
| collection | DOAJ |
| description | We present new evidence from the Euro Survey of the Austrian Central Bank on the level of financial literacy in Romania and analyze how financial literacy is related to household savings. Less than 5% of respondents were able to correctly answer the three “core” financial literacy questions on interest compounding, inflation, and risk diversification, with the risk diversification question posing the greatest difficulties. Twenty percent of respondents are able to answer both the interest compounding and inflation questions correctly. Financial literacy levels differ between regions and across rural and urban areas. Older and less-educated individuals perform worst on the financial literacy questions, but those who remember previous periods of economic turbulence during transition perform better. We find that financial literacy is positively and significantly related to saving and investment. |
| first_indexed | 2024-12-21T19:56:46Z |
| format | Article |
| id | doaj.art-74695fd25e4e4c14b66a6efbc11d6b52 |
| institution | Directory Open Access Journal |
| issn | 1936-4660 |
| language | English |
| last_indexed | 2024-12-21T19:56:46Z |
| publishDate | 2013-07-01 |
| publisher | National Numeracy Network |
| record_format | Article |
| series | Numeracy |
| spelling | doaj.art-74695fd25e4e4c14b66a6efbc11d6b522022-12-21T18:52:05ZengNational Numeracy NetworkNumeracy1936-46602013-07-01629http://dx.doi.org/10.5038/1936-4660.6.2.9Financial Literacy and Household Savings in RomaniaElisabeth BeckmannWe present new evidence from the Euro Survey of the Austrian Central Bank on the level of financial literacy in Romania and analyze how financial literacy is related to household savings. Less than 5% of respondents were able to correctly answer the three “core” financial literacy questions on interest compounding, inflation, and risk diversification, with the risk diversification question posing the greatest difficulties. Twenty percent of respondents are able to answer both the interest compounding and inflation questions correctly. Financial literacy levels differ between regions and across rural and urban areas. Older and less-educated individuals perform worst on the financial literacy questions, but those who remember previous periods of economic turbulence during transition perform better. We find that financial literacy is positively and significantly related to saving and investment.http://scholarcommons.usf.edu/numeracy/vol6/iss2/art9/financial literacyhousehold savingsRomania |
| spellingShingle | Elisabeth Beckmann Financial Literacy and Household Savings in Romania Numeracy financial literacy household savings Romania |
| title | Financial Literacy and Household Savings in Romania |
| title_full | Financial Literacy and Household Savings in Romania |
| title_fullStr | Financial Literacy and Household Savings in Romania |
| title_full_unstemmed | Financial Literacy and Household Savings in Romania |
| title_short | Financial Literacy and Household Savings in Romania |
| title_sort | financial literacy and household savings in romania |
| topic | financial literacy household savings Romania |
| url | http://scholarcommons.usf.edu/numeracy/vol6/iss2/art9/ |
| work_keys_str_mv | AT elisabethbeckmann financialliteracyandhouseholdsavingsinromania |