About this paper

Appears in:
Pages: 2426-2434
Publication year: 2013
ISBN: 978-84-616-3847-5
ISSN: 2340-1095

Conference name: 6th International Conference of Education, Research and Innovation
Dates: 18-20 November, 2013
Location: Seville, Spain

ECONOMIC LITERACY: DOES IT MATTER FOR OVERINDEBTEDNESS?

C. Varum, J. Costa, A. Kolyban

University of Aveiro (PORTUGAL)
At present, the financial market is facing severe constraints arising by household bankruptcy, mortgage debtor defaults and over-indebtedness. It is a common belief that improving economic (and financial in specific) literacy will improve the awareness of individuals about complex issues surrounding them and their ability to take decisions that directly affect their wealth. In this context, and in wider terms, it is argued that higher general awareness about financial issues could have helped to avoid crisis. In recent decades, several changes in the financial and productive systems, in technology, and regarding social and cultural aspects, generated an increasingly economic, financial and sociopolitical environment. Individuals interact in this context, and, more than in the past, have to take complex decisions, with implications for themselves and their families. Not surprisingly, it has been increasingly recognized that under such a complex environment it is extremely important to raise the general level of knowledge of the population in economics.

Along these lines, knowledge in economics latus sensu, that is encompassing also financial aspects, has been receiving increasing attention, in the practitioner and academic literature. The lack of basic knowledge about the functioning of markets may have detrimental consequences, in particular higher exposure to credit ad financial risk. In spite of these wider developments, the importance of economic literacy to wealth has been scarcely explored in empirical terms. This paper contributes to this line of research. Our purpose is to empirically demonstrate the influence of economic literacy in the financial decision making process, and, consequently, in the ability to meet the contracts and for wealth. We analyse the Portuguese case, a country about which there is scant empirical evidence on these matters, and use an original database built under Economicando project. We assess how much knowledge individuals have with respect to economics lato sensu (i.e. including aspects of financial literacy) for which we designed and fielded a new survey focused specifically on economic literacy, including a component of financial literacy. We seek to understand the relationship between economic literacy, over-indebtedness and wealth.
@InProceedings{VARUM2013ECO2,
author = {Varum, C. and Costa, J. and Kolyban, A.},
title = {ECONOMIC LITERACY: DOES IT MATTER FOR OVERINDEBTEDNESS?},
series = {6th International Conference of Education, Research and Innovation},
booktitle = {ICERI2013 Proceedings},
isbn = {978-84-616-3847-5},
issn = {2340-1095},
publisher = {IATED},
location = {Seville, Spain},
month = {18-20 November, 2013},
year = {2013},
pages = {2426-2434}}
TY - CONF
AU - C. Varum AU - J. Costa AU - A. Kolyban
TI - ECONOMIC LITERACY: DOES IT MATTER FOR OVERINDEBTEDNESS?
SN - 978-84-616-3847-5/2340-1095
PY - 2013
Y1 - 18-20 November, 2013
CI - Seville, Spain
JO - 6th International Conference of Education, Research and Innovation
JA - ICERI2013 Proceedings
SP - 2426
EP - 2434
ER -
C. Varum, J. Costa, A. Kolyban (2013) ECONOMIC LITERACY: DOES IT MATTER FOR OVERINDEBTEDNESS?, ICERI2013 Proceedings, pp. 2426-2434.
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