Financial literacy and financial education: The role of irreversible costs

IF 2.1 4区经济学 Q2 ECONOMICS

Economics Letters Pub Date : 2025-02-01 DOI:10.1016/j.econlet.2025.112173

Alessandro Bellocchi, Giuseppe Travaglini

引用次数: 0

Abstract

Financial literacy is a specific “asset” and its achievement may imply irreversible costs. These elements affect the household’s decision to invest in financial education. To explore the issue we use a stochastic dynamic model of portfolio choice in which the cost of financial education is sunk. We show that education costs, uncertainty and irreversibility affect household’s choice to either exercise the option or defer to the future the decision to invest in financial education. This result may provide an explanation to the so-called ‘financial literacy paradox’.

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来源期刊

Economics Letters ECONOMICS-

CiteScore

3.20

自引率

5.00%

发文量

348

审稿时长

30 days

期刊介绍： Many economists today are concerned by the proliferation of journals and the concomitant labyrinth of research to be conquered in order to reach the specific information they require. To combat this tendency, Economics Letters has been conceived and designed outside the realm of the traditional economics journal. As a Letters Journal, it consists of concise communications (letters) that provide a means of rapid and efficient dissemination of new results, models and methods in all fields of economic research.