Antonia Grohmann

Childhood Roots of Financial Literacy

Financial literacy predicts informed financial decisions, but what explains financial literacy? We use the concept of financial socialization and aim to represent three major agents of financial socialization: family, school and work. Thus we compile twelve relevant childhood characteristics in a new survey study and examine their relation to financial literacy, while controlling for established socio-demographic characteristics. We find in a mediation analysis that both family and school positively affect the financial literacy of adults. Moreover, financial literacy and school related variables also have a direct effect on financial behavior. This suggests that family factors and schooling work through complementary channels.

Does Financial Literacy Improve Financial Inclusion? Cross Country Evidence

While financial inclusion is typically addressed by improving the financial infrastructure we show that financial literacy, representing the demand-side of financial markets, also has a beneficial effect. We study this effect at the cross-country level, which allows to consider institutional variation. Regarding “access to finance�?, financial infrastructure and financial literacy are mainly substitutes. However, regarding the “use of financial services�?, the effect of higher financial literacy strengthens the effect of more financial depth. The causal interpretation of these results is supported by IV-regressions. Moreover, the positive impact of financial literacy holds across income levels and several subgroups within countries.

Financial Literacy: Thai Middle Class Women Do Not Lag behind

This research studies the stylized fact of a “gender gap” in that women tend to have lower financial literacy than men. Our data which samples middle-class people from Bangkok does not show a gender gap. This result is not explained by men’s low financial literacy, nor by women’s high income and good education. Rather, it seems influenced by country characteristics on general gender equality and finance-related equality, such as little gender gaps regarding pupils’ mathematics abilities or secondary school enrollment, and women’s strong role in financial affairs. This may indicate ways to reduce the gender gap in financial literacy elsewhere.

The Effect of Peer Observation on Consumption Choices: Experimental Evidence

This paper investigates the impact of peer observation on the consumption decisions of rural households in Thailand using a lab-in-the-field experiment. We find that those groups that observe each other show lower within group standard deviation in their decisions. Thus, we find evidence for conformity. Further, we find that individuals consumption choice is influenced by the group choice controlling for large number of individual, household, and village characteristics. We find that unfamiliarity of the product is counteracted by peer effects. Finally, we find evidence of treatment heterogeneity with regards to cognitive ability and village size.