Financial behavior, confidence, risk preferences and financial literacy of university students
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Date
2018
Authors
Mudzingiri, Calvin
Mwamba, John W. Muteba
Keyser, Jacobus Nicolaas
Journal Title
Journal ISSN
Volume Title
Publisher
Cogent OA
Abstract
This study investigates determinants of financial behavior (FB) of university students at a university in South Africa. It examines whether financial behavior, confidence, time preferences, risk preferences and financial literacy perceptions of university students differ by financial literacy level. Data were gathered via a questionnaire that included personal information, FB, financial perceptions and financial knowledge responses as well as a multiple price list (MPL) risk preferences and time preferences experiment tasks. A convenient total sample of 191 students (females = 53%) participated in the study. A t-test analysis showed that FB, risk preferences, confidence levels, time preferences and financial literacy perceptions
of university students significantly differed by financial literacy level. Our results show that university students with low financial literacy levels are more overconfident, risk loving and impatient; such FB is synonymous with major causes of financial crises across the world. An OLS regression model analysis showed that the risk preferences index, financial literacy perception index and confidence significantly
influenced the FB of categorized university students. The risk preference index significantly influenced debt FB of categorized university students. In order to understand the FB of university students, one should take cognizance of their preferences, financial knowledge, confidence and personal characteristics.
Description
Keywords
Financial behavior, Confidence, Risk preferences, Financial literacy, University students
Citation
Mudzingiri, C., Mwamba, J. W. M., & Keyser, J. N. (2018). Financial behavior, confidence, risk preferences and financial literacy of university students. Cogent Economics & Finance, 6(1), 1-25.