Business, Management and Accounting
4 years ago

Financial literacy leads to risky behavior and overborrowing in households.

1 view
Journal of the Japanese and International Economies
Is Financial Literacy Dangerous? Financial Literacy, Behavioral Factors, and Financial Choices of Households
Tetsuya Kawamura, Tomoharu Mori, Taizo Motonishi, Kazuhito Ogawa

Paper Summary

Financial literacy can lead people to take more risks and borrow excessively, despite being knowledgeable about finances. However, financially literate individuals are better at planning for retirement and are less likely to engage in gambling. Factors like risk aversion and discounting also influence financial decisions.

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