Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/51643 
Year of Publication: 
2011
Series/Report no.: 
IZA Discussion Papers No. 5814
Publisher: 
Institute for the Study of Labor (IZA), Bonn
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: 
Document Type: 
Working Paper

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