Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/316862 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 11748
Publisher: 
CESifo GmbH, Munich
Abstract: 
A propensity to guess randomly rather than to admit ignorance answering "Don't know" is a plausible reason why frequent wrong answers are given to survey questions that aim to assess competence. We model this source of measurement error and assess its empirical relevance in two consecutive waves of a survey of financial literacy. Misclassification of standard financial literacy indicators is very likely, especially in some demographic groups. Respondents who answer correctly in both waves of the survey are less likely to have guessed in the first wave, and have a lower probability of reporting financial difficulties than those who guessed and were lucky enough to appear literate.
Subjects: 
misclassification
guessing
financial literacy
financial resilience
JEL: 
D14
D83
G51
G53
Document Type: 
Working Paper
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