Open AccessThe Impact of Financial Capability in Managing Income and Expenditure on Consumer Financial Satisfaction: Evidence from the USA
Author(s) -
Fuzhong Chen,
Danqing Cheng Zhang
Publication year - 2021
Publication title -
asian journal of economics, business and accounting
Language(s) - English
Resource type - Journals
ISSN - 2456-639X
DOI - 10.9734/ajeba/2021/v21i2230522
Subject(s) - moderation , ordered probit , finance , ordered logit , business , logistic regression , probit model , economics , marketing , public economics , econometrics , computer science , machine learning
Using the survey data of the National Financial Capability Study in 2018, this study aims to provide empirical insight into the impact of financial capability in managing income and expenditure (MIE) on consumer financial satisfaction. To produce more accurate results, the approach of the ordered logit regression is utilized. The results suggest a positive association between financial capability in MIE and consumer financial satisfaction, implying that consumers who can manage their spending within income tend to enjoy a higher level of satisfaction under current financial conditions. In addition, when an ordered probit regression is utilized, and the outliers of income and the heterogeneity of consumers’ annual income are taken into account, the results remain unchanged. Moreover, this study also verifies the role of perceived mathematical capability as a moderator. Hence, the findings enable policymakers and consumer educators to formulate effective measures to enhance consumer financial capability in MIE.