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| Title: | | Exponential growth bias and financial literacy  |
| Authors: | | Almenberg, Johan Gerdes, Christer |
| Issue Date: | | 2011 |
| Series/Report no.: | | Discussion paper series // Forschungsinstitut zur Zukunft der Arbeit 5814 |
| Abstract: | | The tendency to underestimate the future value of a variable growing at a constant rate, an example of exponential growth bias, has been linked to household financial decision making. We show that exponential growth bias and standard measures of financial literacy are negatively correlated in a representative sample of Swedish adults. Since financial literacy is linked to household decision making, our results indicate that examining the relationship between exponential growth bias and household finance without adequate controls for financial literacy may generate biased results. |
| Subjects: | | exponential growth bias financial literacy household finance |
| JEL: | | D12 D14 |
| Persistent Identifier of the first edition: | | urn:nbn:de:101:1-201107042639 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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