Financial Literacy and Financial Risk Tolerance of Lottery Gamblers in Thailand

Abstract

This paper investigates the impacts of financial literacy level, financial risk tolerance and demographic characteristics on gambling behavior of informal laborers. The data were analyzed by Multivariate Analysis of Variance and Multinomial Logistic Regression. The total of 995 participants used in this research were collected by Multi-Stage Randomization from the informal laborers in Southern Thailand. The empirical analysis revealed that the financial literacy confidence, the risk tolerance, and the demographic characteristics were significant determinants of the gambler’s behavior. The older the gamblers were, the more they got addicted to gambling. Also, the more the people perceived that they have a high level of financial literacy, the more they would gamble. However, it was found that the female laborers were more frequent gamblers than the males. Thus, agencies responsible for supervising the financial education should be aware of the expected outcomes, not only focusing on actual financial literacy, but also supporting the individuals to achieve a healthy level of financial literacy confidence.