{"title":"Wealth, Financial Literacy and Behavioral Biases in Japan: the Effects of Various Types of Financial Literacy","authors":"Shizuka Sekita , Vikas Kakkar , Masao Ogaki","doi":"10.1016/j.jjie.2021.101190","DOIUrl":null,"url":null,"abstract":"<div><p>This paper considers the relationship between wealth, financial literacy and several other variables using data from Japan's first large-scale survey on financial literacy. Using an instrumental variables approach to account for possible endogeneity of financial literacy, we find that financial literacy has an economically large and positive impact on wealth accumulation. We also decompose financial literacy into 5 sub-categories and find that deposits literacy, risk literacy and debt literacy have significant impacts on wealth accumulation in Japan, whereas inflation literacy and insurance literacy do not. Several variables suggested by behavioral economics, such as over-confidence, self-control, myopia and risk-aversion are also significant determinants of wealth.</p></div>","PeriodicalId":47082,"journal":{"name":"Journal of the Japanese and International Economies","volume":"64 ","pages":"Article 101190"},"PeriodicalIF":2.6000,"publicationDate":"2022-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0889158321000691/pdfft?md5=ae143b00b4374e79ff899aa263967f21&pid=1-s2.0-S0889158321000691-main.pdf","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of the Japanese and International Economies","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0889158321000691","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
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Abstract
This paper considers the relationship between wealth, financial literacy and several other variables using data from Japan's first large-scale survey on financial literacy. Using an instrumental variables approach to account for possible endogeneity of financial literacy, we find that financial literacy has an economically large and positive impact on wealth accumulation. We also decompose financial literacy into 5 sub-categories and find that deposits literacy, risk literacy and debt literacy have significant impacts on wealth accumulation in Japan, whereas inflation literacy and insurance literacy do not. Several variables suggested by behavioral economics, such as over-confidence, self-control, myopia and risk-aversion are also significant determinants of wealth.
期刊介绍：
The Journal of the Japanese and International Economies publishes original reports of research devoted to academic analyses of the Japanese economy and its interdependence on other national economies. The Journal also features articles that present related theoretical, empirical, and comparative analyses with their policy implications. Book reviews are also published.
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