Welcome to the 2018 AFS Annual Meeting, being held this year, in conjunction with FPA in Chicago!
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Wednesday, October 3 • 2:00pm - 3:00pm
H4a - The Effect of Financial Literacy on Homeowners and Renters Having a Heavy Financial Obligations Burden

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Previous research using the Survey of Consumer Finances (SCF) has found a positive effect of education on the likelihood of having financial obligations ratio over 40%, but until 2016, SCF datasets did not have direct measures of financial literacy.  The 2016 SCF dataset has three financial literacy questions, allowing for the use of a financial literacy score as an independent variable. The purpose of this study was to analyze how financial literacy affected the likelihood of U.S. renter and homeowner households having a financial obligations ratio over 40%. Based on the logistic regression results, no evidence of relationship is supported between financial literacy scores and households’ having a heavy financial obligations burden. The lack of an effect of financial literacy on having a heavy financial obligations burden suggests that having a financial obligations burden over 40% of income is not necessarily a mistake, for both homeowners or for renters.

Author(s): Congrong Ouyang, Sherman D. Hanna

avatar for Congrong Ouyang

Congrong Ouyang

PhD student, Ohio State University

Wednesday October 3, 2018 2:00pm - 3:00pm CDT
Michigan 2

Attendees (2)