EconStor >
Goethe-Universität Frankfurt am Main >
Center for Financial Studies (CFS), Universität Frankfurt a. M.  >
CFS Working Paper Series, Universität Frankfurt a. M. >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/43242
  

Full metadata record

DC FieldValueLanguage
dc.contributor.authorLusardi, Annamariaen_US
dc.contributor.authorTufano, Peteren_US
dc.date.accessioned2009-08-06en_US
dc.date.accessioned2010-12-15T09:22:22Z-
dc.date.available2010-12-15T09:22:22Z-
dc.date.issued2009en_US
dc.identifier.piurn:nbn:de:hebis:30-63796-
dc.identifier.urihttp://hdl.handle.net/10419/43242-
dc.description.abstractWe analyze a national sample of Americans with respect to their debt literacy, financial experiences, and their judgments about the extent of their indebtedness. Debt literacy is measured by questions testing knowledge of fundamental concepts related to debt and by selfassessed financial knowledge. Financial experiences are the participants' reported experiences with traditional borrowing, alternative borrowing, and investing activities. Overindebtedness is a self-reported measure. Overall, we find that debt literacy is low: only about one-third of the population seems to comprehend interest compounding or the workings of credit cards. Even after controlling for demographics, we find a strong relationship between debt literacy and both financial experiences and debt loads. Specifically, individuals with lower levels of debt literacy tend to transact in high-cost manners, incurring higher fees and using high-cost borrowing. In applying our results to credit cards, we estimate that as much as one-third of the charges and fees paid by less knowledgeable individuals can be attributed to ignorance. The less knowledgeable also report that their debt loads are excessive or that they are unable to judge their debt position.en_US
dc.language.isoengen_US
dc.publisherCenter for Financial Studies Frankfurt, Mainen_US
dc.relation.ispartofseriesCFS Working Paper 2009/08en_US
dc.subject.jelD14en_US
dc.subject.jelD91en_US
dc.subject.ddc330en_US
dc.subject.keywordFinancial Literacyen_US
dc.subject.keywordNumeracyen_US
dc.subject.keywordDebt Loadsen_US
dc.subject.keywordCredit Card Borrowingen_US
dc.subject.stwPrivate Verschuldungen_US
dc.subject.stwBewertungen_US
dc.subject.stwBildungsniveauen_US
dc.subject.stwLernprozessen_US
dc.subject.stwKreditkarteen_US
dc.subject.stwBefragungen_US
dc.subject.stwUSAen_US
dc.titleDebt literacy, financial experiences, and overindebtednessen_US
dc.typeWorking Paperen_US
dc.identifier.ppn606213376en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
dc.identifier.repecRePEc:zbw:cfswop:200908-
Appears in Collections:CFS Working Paper Series, Universität Frankfurt a. M.

Files in This Item:
File Description SizeFormat
606213376.pdf310.12 kBAdobe PDF
No. of Downloads: Counter Stats
Show simple item record
Download bibliographical data as: BibTeX

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.