TY - JOUR
T1 - Wealth, Financial Literacy and Behavioral Biases in Japan
T2 - the Effects of Various Types of Financial Literacy
AU - Sekita, Shizuka
AU - Kakkar, Vikas
AU - Ogaki, Masao
N1 - Funding Information:
We are very grateful to Mr. Noriaki Kawamura for providing us with the data collected by the Financial Literacy Survey 2016 conducted by the Central Council for Financial Services Information in Japan. We would like to thank two anonymous referees and participants at the Economics of the Family Workshop 2018 in Tokyo, Osaka University Joint Usage Workshop on Household Economics 2018, China Greater Bay Area Experimental Economics Workshop 2018 in Hong Kong, European Economics and Finance Society 2018 conference in London, Southwestern Finance Association 2019 in Houston, the IAREP/SABE 2019 conference in Dublin and the Asia Pacific Financial Education Institute 2021 virtual conference for helpful comments. We would also like to thank, without implicating, Charles Yuji Horioka, Shinya Kajitani, Wataru Kureishi, Annamaria Lusardi, Colin McKenzie, Yoko Niimi, Kei Sakata, Keiko Tamada, Tien Manh Vu, Midori Wakabayashi, and Junmin Wan for helpful comments. Sekita's work was partly supported by JSPS KAKENHI Grant No. JP26380337. Kakkar's work was partly supported by City University of Hong Kong's Strategic Research Grant 7004770. Ogakis work was partly supported by JSPS KAKENHI Grant Numbers 16H03640 and 19H00599.
Funding Information:
We are very grateful to Mr. Noriaki Kawamura for providing us with the data collected by the Financial Literacy Survey 2016 conducted by the Central Council for Financial Services Information in Japan. We would like to thank two anonymous referees and participants at the Economics of the Family Workshop 2018 in Tokyo, Osaka University Joint Usage Workshop on Household Economics 2018, China Greater Bay Area Experimental Economics Workshop 2018 in Hong Kong, European Economics and Finance Society 2018 conference in London, Southwestern Finance Association 2019 in Houston, the IAREP/SABE 2019 conference in Dublin and the Asia Pacific Financial Education Institute 2021 virtual conference for helpful comments. We would also like to thank, without implicating, Charles Yuji Horioka, Shinya Kajitani, Wataru Kureishi, Annamaria Lusardi, Colin McKenzie, Yoko Niimi, Kei Sakata, Keiko Tamada, Tien Manh Vu, Midori Wakabayashi, and Junmin Wan for helpful comments. Sekita's work was partly supported by JSPS KAKENHI Grant No. JP26380337. Kakkar's work was partly supported by City University of Hong Kong's Strategic Research Grant 7004770. Ogakis work was partly supported by JSPS KAKENHI Grant Numbers 16H03640 and 19H00599.
Publisher Copyright:
© 2022 The Authors
PY - 2022/6
Y1 - 2022/6
N2 - 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.
AB - 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.
KW - Biases
KW - Financial literacy
KW - Instrumental variables
KW - Wealth
UR - http://www.scopus.com/inward/record.url?scp=85123987579&partnerID=8YFLogxK
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U2 - 10.1016/j.jjie.2021.101190
DO - 10.1016/j.jjie.2021.101190
M3 - Article
AN - SCOPUS:85123987579
SN - 0889-1583
VL - 64
JO - Journal of The Japanese and International Economies
JF - Journal of The Japanese and International Economies
M1 - 101190
ER -