Financial Competence and Expectations Formation: Evidence from Australia

Bateman, H; Eckert, C; Geweke, J; Louviere, J; Thorp, S; Satchell, S

Financial Competence and Expectations Formation: Evidence from Australia

Bateman, H Eckert, C

Geweke, J Louviere, J

Thorp, S

Satchell, S

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Publication Type:: Journal Article
Citation:: Economic Record, 2012, 88 (280), pp. 39 - 63
Issue Date:: 2012-03-01

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Field	Value	Language
dc.contributor.author	Bateman, H	en_US
dc.contributor.author	Eckert, C https://orcid.org/0000-0002-8573-6978	en_US
dc.contributor.author	Geweke, J	en_US
dc.contributor.author	Louviere, J https://orcid.org/0000-0001-7688-164X	en_US
dc.contributor.author	Thorp, S https://orcid.org/0000-0003-3462-0876	en_US
dc.contributor.author	Satchell, S	en_US
dc.date.issued	2012-03-01	en_US
dc.identifier.citation	Economic Record, 2012, 88 (280), pp. 39 - 63	en_US
dc.identifier.issn	0013-0249	en_US
dc.identifier.uri	http://hdl.handle.net/10453/18826
dc.description.abstract	We study the financial competence of Australian retirement savers using self-assessed and quantified measures. Responses to financial literacy questions show large variation and compare poorly with some international surveys. Basic and sophisticated financial literacy vary significantly with most demographics, self-assessed financial competence, income, superannuation accumulation and net worth. General numeracy scores are largely constant across gender, age, higher education and income. Financial competence also significantly affects expectations of stock market performance. Using a discrete choice model, we show that individuals with a higher understanding of risk, diversification and financial assets are more likely to assign a probability to future financial crises rather than expressing uncertainty. © 2011 The Economic Society of Australia.	en_US
dc.relation.ispartof	Economic Record	en_US
dc.relation.isbasedon	10.1111/j.1475-4932.2011.00766.x	en_US
dc.subject.classification	Economics	en_US
dc.title	Financial Competence and Expectations Formation: Evidence from Australia	en_US
dc.type	Journal Article
utslib.citation.volume	280	en_US
utslib.citation.volume	88	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	1402 Applied Economics	en_US
utslib.for	14 Economics	en_US
utslib.for	15 Commerce, Management, Tourism and Services	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Economics Discipline
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Marketing Discipline
pubs.organisational-group	/University of Technology Sydney/Strength - CENSOC - Study of Choice
utslib.copyright.status	open_access
pubs.issue	280	en_US
pubs.publication-status	Published	en_US
pubs.volume	88	en_US

Abstract:

We study the financial competence of Australian retirement savers using self-assessed and quantified measures. Responses to financial literacy questions show large variation and compare poorly with some international surveys. Basic and sophisticated financial literacy vary significantly with most demographics, self-assessed financial competence, income, superannuation accumulation and net worth. General numeracy scores are largely constant across gender, age, higher education and income. Financial competence also significantly affects expectations of stock market performance. Using a discrete choice model, we show that individuals with a higher understanding of risk, diversification and financial assets are more likely to assign a probability to future financial crises rather than expressing uncertainty. © 2011 The Economic Society of Australia.

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http://hdl.handle.net/10453/18826