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
H1b - Exploring the Effect of Financial Literacy on Financial Risk Tolerance: Evidence from the 2016 Survey of Consumer Finances

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We examined the association between financial literacy and financial risk tolerance of US households using the 2016 Survey of Consumer Finances (SCF) dataset.  Results from three logistic regressions on cumulative components of the risk tolerance variable showed that both objective and perceived financial knowledge were positively related to financial risk tolerance. Specifically, objective financial knowledge was positively associated with both willingness to take some risk and high risk while perceived knowledge was positively associated with willingness to take high and substantial risk. This study is the first to estimate the effects of financial literacy on the traditional SCF risk tolerance variable.

Author(s): Kyoung Tae Kim, Sherman D. Hanna

avatar for Sherman Hanna

Sherman Hanna

Professor, The Ohio State University
Professor, and Chair, Consumer Sciences Program Ohio State University. He has published in Applied Economics Letters, Financial Services Review, Journal of Consumer Research, Journal of Consumer Affairs, Family and Consumer Sciences Research Journal, International Journal of Consumer... Read More →

Wednesday October 3, 2018 2:00pm - 3:00pm CDT
Michigan 1A

Attendees (3)