Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/309928 
Year of Publication: 
2023
Citation: 
[Journal:] International Review of Economics [ISSN:] 1863-4613 [Volume:] 71 [Issue:] 1 [Publisher:] Springer [Place:] Berlin, Heidelberg [Year:] 2023 [Pages:] 19-45
Publisher: 
Springer, Berlin, Heidelberg
Abstract: 
Our study contributes to a better understanding of the relationship between financial literacy and households' investments in risky assets. We estimate a structural equation model with data from the Panel on Household Finances of the German central bank. Our results show that although households' net wealth is the dominant driver of investments in risky assets, financial literacy plays a remarkable role. Financial literacy has an indirectly positive influence on participation in the financial market. The higher the financial literacy, the lower is the risk aversion. The lower the risk aversion, the higher is the participation in the financial market.
Subjects: 
Financial markets participation
Risky investments
Personal finance
Household finance
JEL: 
D14
D81
D91
G11
G41
G51
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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