Are people ready to take pivotal financial decisions like choosing a mortgage, saving for retirement, or investing their savings? How does the degree of knowledge about financial products and services affect the quality of their choices? Can financial fraud be prevented by increasing consumer financial knowledge?
Financial Literacy in Europe addresses these important questions and more. In the first part, the author investigates the concept of financial literacy by analyzing its components and comparing different definitions from previous studies. This then forms a comprehensive measure of financial literacy to be applied in empirical studies that analyze the role of financial literacy in explaining consumers’ financial behaviors. In the second part of the study, the author uses brand new data collected by the Consumer Finance Research Center (CFRC) from several European countries (the UK, Germany, France, Italy, Sweden, and Spain) to assess financial literacy in Europe and highlight similarities and differences across countries.
Filling an important gap in previous research, the author develops a rigorous approach in the measurement of financial literacy in order to examine European financial literacy issues in great detail. This book, therefore, is a useful resource for assessing the effectiveness of single financial education programs or planning national strategies on financial education. It can also support policy makers in developing financial regulation and consumer protection strategies, considering the consumer perspective and their ability to deal with financial markets and institutions.
Table of Contents
Part I – Financial literacy: a theoretical framework and evidence from previous studies
1 Financial literacy: definition and measurement
1.1 Financial literacy: a definition 1.2 Financial literacy as a relative concept 1.3 How to measure financial literacy 1.4 Financial literacy measures from previous studies References
2 Financial literacy and financial behavior
2.1 The role of financial literacy in the financial decision making process 2.2 The new challenges of financial literacy between personal financial behaviors and social outcomes 2.3 Financial literacy and financial behaviors: some evidence from previous studies 2.4 Conclusions References
Part II – Financial literacy in Europe
3 Financial literacy in Europe: an overview
3.1 Introduction 3.2 Financial literacy of young students: the PISA project 3.3 Financial literacy of adults: the OECD-INFE study 3.4 Conclusions References
4 Financial literacy in the UK
4.1 Introduction 4.2 Data 4.3 The characteristics of financial literacy in the UK 4.4 The determinants of financial literacy in the UK 4.5 Conclusions References
5 Financial literacy in Germany
5.1 Introduction 5.2 The characteristics of financial literacy in Germany 5.3 The determinants of financial literacy in Germany 5.4 Conclusions References
6 Financial literacy in France
6.1 Introduction 6.2 The characteristics of financial literacy in France 6.3 The determinants of financial literacy in France 6.4 Conclusions References
7 Financial literacy in Italy
7.1 Introduction 7.2 The characteristics of financial literacy in Italy 7.3 The determinants of financial literacy in Italy 7.4 Conclusions References
8 Financial literacy in Spain
8.1 Introduction 8.2 The characteristics of financial literacy in Spain 8.3 The determinants of financial literacy in Spain 8.4 Conclusions References
9 Financial literacy in Sweden
9.1 Introduction 9.2 The characteristics of financial literacy in Sweden 9.3 The determinants of financial literacy in Sweden 9.4 Conclusions References
Appendix: Financial literacy items
Gianni Nicolini is Associate Professor of Finance at the University of Rome "Tor Vergata" (Department of Management and Law). His main research interest is Consumer Finance, with a special interest on Financial Literacy and Financial Education. In 2016 he established, with other researchers, the Consumer Finance Research Center (CFRC) with the aim to develop high quality research on consumer issues.