TY - JOUR
T1 - Whom to educate? Financial literacy and investor awareness
AU - Gui, Zhengqing
AU - Huang, Yangguang
AU - Zhao, Xiaojian
PY - 2021/6
Y1 - 2021/6
N2 - We conducted an experiment and survey in Shenzhen, China, to measure individuals' risk preferences, financial literacy, and the effect of a financial education program. A proportion of individuals may be unaware of the high risk associated with a high-return financial product and thus may purchase financial products inconsistent with their risk attitudes. Participating in our education program significantly reduced individuals' tendency to hypothetically invest in high-risk products, especially for those who are risk-averse. Therefore, rather than randomly assigning the education program to investors, we suggest that risk-averse investors be targeted. We find that the responses to standard financial literacy questions are not related to individuals' awareness of the link between high risk and high return, calling for a newly designed question of financial literacy as proposed in our study.
AB - We conducted an experiment and survey in Shenzhen, China, to measure individuals' risk preferences, financial literacy, and the effect of a financial education program. A proportion of individuals may be unaware of the high risk associated with a high-return financial product and thus may purchase financial products inconsistent with their risk attitudes. Participating in our education program significantly reduced individuals' tendency to hypothetically invest in high-risk products, especially for those who are risk-averse. Therefore, rather than randomly assigning the education program to investors, we suggest that risk-averse investors be targeted. We find that the responses to standard financial literacy questions are not related to individuals' awareness of the link between high risk and high return, calling for a newly designed question of financial literacy as proposed in our study.
KW - China
KW - Financial education
KW - Financial literacy
KW - Unawareness
UR - http://www.scopus.com/inward/record.url?scp=85102496974&partnerID=8YFLogxK
U2 - 10.1016/j.chieco.2021.101608
DO - 10.1016/j.chieco.2021.101608
M3 - Article
AN - SCOPUS:85102496974
VL - 67
JO - China Economic Review
JF - China Economic Review
SN - 1043-951X
M1 - 101608
ER -