Author:
Oehler Andreas,Horn Matthias,Wendt Stefan
Abstract
AbstractOur study contributes to a better understanding of the relationship between financial literacy and households’ investments in risky assets. We estimate a structural equation model with data from the Panel on Household Finances of the German central bank. Our results show that although households’ net wealth is the dominant driver of investments in risky assets, financial literacy plays a remarkable role. Financial literacy has an indirectly positive influence on participation in the financial market. The higher the financial literacy, the lower is the risk aversion. The lower the risk aversion, the higher is the participation in the financial market.
Funder
Deutsche Bundesbank
Otto-Friedrich-Universität Bamberg
Publisher
Springer Science and Business Media LLC
Subject
General Economics, Econometrics and Finance
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