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Earlier financial literacy and later financial behaviour of college students
Author(s) -
Xiao Jing Jian,
Ahn Sun Young,
Serido Joyce,
Shim Soyeon
Publication year - 2014
Publication title -
international journal of consumer studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.775
H-Index - 71
eISSN - 1470-6431
pISSN - 1470-6423
DOI - 10.1111/ijcs.12122
Subject(s) - financial literacy , psychology , association (psychology) , control (management) , finance , point (geometry) , panel data , social psychology , developmental psychology , economics , management , econometrics , geometry , mathematics , psychotherapist
This study examined the association of earlier financial literacy and later financial behaviour of college students. Financial literacy was measured by both subjective and objective knowledge and financial behaviours were categorized into risky paying and borrowing behaviours. Based on data collected at two time points from a panel of college students at a major state university in the USA, the results showed that the association between earlier knowledge and later financial behaviours differed by the specific type of knowledge (subjective vs. objective), with stronger effect of subjective knowledge, compared with objective knowledge on both composite and individual measures of risky borrowing and paying behaviours. We found that only subjective knowledge was correlated with a reduction in both composite behaviours. Both subjective and objective knowledge, however, reduced some specific risky paying and borrowing behaviours. Finally, we found consistent differences for two of the control variables: higher GPA (Grade Point Average) was associated with fewer risky paying behaviours; and gender (male vs. female) was associated with more of both types of risky behaviours.