TY - JOUR
T1 - Financial Self-awareness
T2 - Who Knows What They Don't Know?
AU - Bazley, William J.
AU - Bonaparte, Yosef
AU - Korniotis, George M.
PY - 2020/1/1
Y1 - 2020/1/1
N2 - We examine the influence of financial literacy and perceptions of financial knowledge on households’ financial risk-taking. Greater literacy and self-belief in one's literacy positively relate to equity ownership. However, self-awareness of illiteracy reduces participation by about 5%. We find that financial self-awareness is impacted by innate traits and environmental elements. Specifically, it is reduced by risk-seeking preferences and rising income but increases with income uncertainty. Overall, we demonstrate that accurate self-assessment has implications for individuals’ portfolio choices, which suggests policy implications for improving financial decision-making.
AB - We examine the influence of financial literacy and perceptions of financial knowledge on households’ financial risk-taking. Greater literacy and self-belief in one's literacy positively relate to equity ownership. However, self-awareness of illiteracy reduces participation by about 5%. We find that financial self-awareness is impacted by innate traits and environmental elements. Specifically, it is reduced by risk-seeking preferences and rising income but increases with income uncertainty. Overall, we demonstrate that accurate self-assessment has implications for individuals’ portfolio choices, which suggests policy implications for improving financial decision-making.
KW - Financial literacy
KW - Self-awareness
KW - Stock market participation
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U2 - 10.1016/j.frl.2020.101445
DO - 10.1016/j.frl.2020.101445
M3 - Article
AN - SCOPUS:85078844270
JO - Finance Research Letters
JF - Finance Research Letters
SN - 1544-6123
M1 - 101445
ER -