Fearless Woman: Financial Literacy and Stock Market Participation

Arbeitspapier

Women are less financially literate than men. It is unclear whether this gap reflects a lack of knowledge or, rather, a lack of confidence. Our survey experiment shows that women tend to disproportionately respond 'do not know' to questions measuring financial knowledge, but when this response option is unavailable, they often choose the correct answer. We estimate a latent class model and predict the probability that respondents truly know the correct answers. We find that about one-third of the financial literacy gender gap can be explained by women's lower confidence levels. Both financial knowledge and confidence explain stock market participation.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 21-015

Classification and Topics

• Classification: Wirtschaft ; Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡
• Subject: financial knowledge ; gender gap ; financial decision making ; confidence ; measurement error ; latent class model ; finite mixture model

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bucher-Koenen, Tabea ; Alessie, Rob ; Lusardi, Annamaria ; van Rooij, Maarten
• Event: Veröffentlichung
• (who): ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
• (where): Mannheim
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/231301
• Last update: 10.03.2025, 11:43 AM CET