Is there a link between financial literacy and financial behaviour?

Figures & data

Table 1. Variables and measurment

Variable	Measurement
Personal Finance Opinion	1= l if the individual scored above the mean of correct responds under personal finance opinion, 0 if <or = the mean
Personal Finance Decision	1= l if the individual scored above the mean of correct responds under personal finance decisions, 0 if otherwise
Personal Finance Management Practices	1= l if the individual scored above the mean of correct responds for personal financial management practices, 0 if otherwise
Financial Behaviour	1= if the score is above the mean score of the aggregates, 0 if otherwise.
Financial Literacy	1= if subject is financially literate, 0 if not.
PC – Variables for Personal Characteristics
Rank 1	1 if respondent is a level 100 and 200 student, 0 if not
Rank 2	1 if respondent is a level 300 and 400 student; 0 if not
SHS-Field of Study1	1 if respondent business at SHS; 0 if not
SHS-Field of Study2	1 if respondent studied general arts with economics at SHS; 0 if not
SHS-Field of Study3	1 if respondent studied general arts without economics at SHS; 0 if not
SHS-Field of Study4	1 if respondent studied Science at SHS; 0 if not
SHS-Field of study 5	1 if respondent studied visual arts at SHS; 0 if not
Acc & Finance	1 if subject majors in accounting and finance; 0 if not
Unistudy	1 if subject is not a Business student; 0 if not
Male	1 if subject is a male; 0 if not
Exp1	1 if subject has no work experience; 0 if not
Exp2	1 if subject has less than 2 years work experience; 0 if not
Age1	1 if subject’s age is up to 20 years; 0 if not
Age2	1 if subject is in the age group of 21 to 25 years; 0 if not
Age3	1 if subject is in the age group of 26 to 30 years; 0 if not
Income1	1 if subject earns less than GH¢400; 0 if not
Income 2	1 if subject earns GH¢400 to 1,499; 0 if not
FC - Variables for Family Characteristics
FatherSch1	1 if respondent’s father’s education is SHS and below; 0 if not
FatherSch2	1 if respondent’s father has training college and polytechnic/equivalent education; 0 if not
MotherSch1	1 if respondent’s mother education is JHS and below; 0 if not
MotherSch2	1 if respondent’s mother has SHS, training college and polytechnic/equivalent education; 0 if not
FathOccu1	if subject’s father is Unemployed,; 0 if not
FathOccu2	1 if subject’s father is Self-employed; 0 if not
MothOccu1	1 if subject’s mother is Unemployed; 0 if not
MothOccu2	1 if subject’s mother is Self-employed; 0 if not
Discusfinan	1 if respondent has never discussed financial issues; 0 if not;
Drive	Drive = 1 if subject drives a car; 0 if not.
EXPO1 - Variables for Exposure Via Housing Arrangement and Financing of Education
Capitaltown	1 if subject is living in a capital town; 0 if not
House1	1 if subject resides on-campus hall; 0 if not
House2	1 if subject resides off-campus rent/hostel; 0 if not
House3	1 if subject off-campus own house; 0 if not
Educfinan1	1 if subject’s education is fully financed by self; 0 if not
Educfinan2	1 if subject’s education is fully financed by family; 0 if not
Educfinan3	1 if subject’s education is financed by both self and family; 0 if not
Personalac	1 if subject does not have a personal account; 0 if not
Investaccount	1 if subject does not have an investment account; 0 if not

Table 2. Demographic characteristics of respondents

	Number of Respondents	Percentage
A. Education
1. Academic Discipline
a) Business Majors	1682	42.9
b) Non-Business Majors	2242	57.1
2. Business Concentration
a) Accounting and Finance Majors	1105	66.0
b) Non-accounting and Finance Majors	570	34.0
2. Class Rank
a) Level 100	802	20.4
b) Level 200	815	20.7
c) Level 300	968	24.6
d) Level 400 and above	745	18.9
e) PG	602	15.3
4. SHS Education
a) Business	1528	38.8
b) Arts	1188	30.1
c) Science	1225	31.1
B. Gender
a) Male	2390	60.8
b) Female	1541	39.2
C. Experience
1. Years of Work Experience
a) None	1348	34.4
b) Less than 2 years	1235	31.5
c) Two to less than 4 years	635	16.2
d) Four to less than 6 years	300	7.7
e) Six years or more	403	10.3
2. Years of Age
a) Up to 20	808	20.6
b) 21–25	1911	48.6
c) 26–30	749	19.1
d) 31–40	406	10.3
e) 41 and above	57	1.5
D. Income
1. Student personal income
a) Under GH¢ 400	1444	36.8
b) GH¢ 400–1,499	1548	39.5
c) GH¢ 1,500–4,999	558	14.2
d) GH¢ 5,000–14,999	241	6.1
e) More than GH¢ 15000	130	3.3

Table 3. Mean % of responses by personal characteristics and results of ANOVA

	Personal Finance Opinion	Personal Finance Decision	Personal Financial Management Practices	Financial Behaviour
Education
a) Business Majors	43.07	45.68	42.73	42.94
b) Non-Business Majors	42.32	39.36	42.79	42.57
F-Statistics	(0.222)	(15.985)***	(0.002)	(0.056)
Class Rank
a) Level 100	59.73	55.49	46.76	51.50
b) Level 200	55.95	56.44	47.24	52.02
c) Level 300	58.47	43.29	45.66	51.65
d) Level 400	57.99	40.67	50.20	51.01
e) Post Graduate	63.95	31.06	58.31	57.31
F-Statistics	(2.462)**	(33.623)***	(7.100)***	(1.731)
Business Concentration
a) Accounting/Finance	61.12	38.35	48.04	53.02
b) Other	58.29	49.35	49.60	52.45
F-Statistics	(2.650)	(39.358)***	(0.779)	(0.106)
SHS-Field of Study
a) Business	60.46	41.97	48.42	52.83
b) General Arts with Economics	60.85	47.34	50.81	54.39
c) General Arts without Economics	57.45	44.26	50.21	49.36
d) Sciences	57.15	50.66	47.70	51.48
e) Visual Arts	43.02	48.84	55.81	48.84
F-Statistics	(3.404)*	(5.448)***	(0.974)	(0.799)
Gender
Male	59.12	45.61	49.33	52.13
Female	58.73	46.92	48.54	52.95
F-Statistics	(0.060)	(0.648)	(0.234)	(0.252)
Work Experience in Years
a) None	57.12	54.01	42.80	48.81
b) Less than 2years	58.54	45.59	46.48	50.53
c) 2 to less than 4 years	61.10	40.94	52.60	55.75
d) 4 to less than 6 years	60.33	40.00	59.67	58.00
e) 6 or more years	62.53	33.75	63.28	61.54
F-Statistics	(1.383)	(17.815)***	(18.744)***	(7.245)***
Age in Years
a) Up to 20	58.29	52.85	46.66	51.11
b) 21 to 25	57.82	48.14	43.80	49.50
c) 26 to 30	60.75	39.92	57.14	57.94
d) 31 to 40	61.82	35.96	61.82	58.62
e) 41 and above	61.40	38.60	57.89	52.63
F-Statistics	(0.918)	(12.031)***	(18.014)***	(5.649)***
Income
a) Under 400	56.99	50.62	43.42	49.58
b) 400–1,499	61.30	45.03	49.87	54.07
c) 1,500–4,999	56.99	40.50	55.56	52.69
d) 5,000–14,999	60.17	40.66	58.09	55.60
e) 15000 and above	57.69	42.31	55.38	57.69
F-Statistics	(1.737)	(5.844)***	(9.617)***	(2.199)*
*P < 0.1, **P < 0.05 and ***P < 0.01

Table 4. Mean % of responses by family characteristics and results of ANOVA

	Personal Finance Opinion	Personal Finance Decision	Personal Financial Management Practices	Financial Behaviour
Family Characteristics
1.Fathers Education
a) None/JSS/MSLC	60.84	42.50	47.66	53.01
b) SHS/Equivalent	60.22	45.98	44.27	51.55
c)Training College, Nursing College, Polytechnic/Equivalent	60.86	47.90	50.66	54.62
d) Bachelor’s degree	55.49	47.54	51.88	50.72
e)Masters/doctorate/professional	59.08	48.15	52.00	53.85
f) Other	30.77	53.85	38.46	30.77
F-Statistics	(2.133)*	(1.709)	(2.525)**	(1.109)
2.Mothers Education
a) None/JSS/MSLC	62.50	42.43	47.29	52.71
b) SHS/Equivalent	59.77	46.66	46.53	51.54
c)Training College, Nursing College, Polytechnic/ Equivalent	57.28	45.40	54.02	55.06
d)Bachelor’s degree	53.27	58.29	49.25	52.51
e)Masters/doctorate/professional	54.13	52.29	54.13	50.00
F-Statistics	(3.533)***	(7.777)***	(2.977)**	(0.658)
3.Fathers Occupation
a) Unemployed	53.04	43.59	48.07	50.83
b) Self Employed	58.41	47.63	48.18	53.18
c. Employee	61.82	52.82	50.51	52.83
F-Statistics	(5.463)***	(8.615)***	(1.051)	(0.337)
4.Mothers Occupation
a) Unemployed	53.57	51.83	46.26	49.57
b) Self Employed	60.30	45.01	48.84	52.93
c) Employee	60.51	45.57	51.87	54.43
F-Statistics	(4.705)***	(4.421)	(2.390)*	(1.714)
*P < 0.1, **P < 0.05 and ***P < 0.01

Table 5. Mean % of responses by exposure variables and results of ANOVA

	Personal Finance Opinion	Personal Finance Decision	Personal Financial Management Practices	Financial Behaviour
Driving Experience
Yes	58.18	43.61	53.41	54.26
No	59.81	47.23	47.35	52.10
F-Statistics	(0.903)	(4.330)**	(12.078)***	(1.530)
Capital Town
Yes	62.52	41.08	50.31	53.60
No	55.96	53.25	47.71	52.16
F-Statistics	(16.625)***	(55.820)***	(2.484)	(0.774)
Housing Arrangement
a) On-campus	58.29	47.69	46.25	50.72
b) Off-campus rent/hostel	60.69	46.35	50.21	54.60
c) Off-campus-own house	59.84	43.17	57.38	55.46
d) Live with Parents/relative	54.50	37.91	46.92	44.55
F-Statistics	(1.133)	(2.150)*	(4.245)***	(2.925)**
Financing Education
a) Fully Self	60.32	38.07	63.69	61.26
b) Fully family	57.63	48.78	43.55	48.27
c)Both Self and Family	64.62	45.47	54.68	61.05
d)Scholarship/Sponsorship	57.94	46.03	53.17	50.79
F-Statistics	(3.103)**	(6.203)***	(24.996)***	(15.059)***
Financial Market Participation Financial Accounts
a)Personal Accounts
Yes	82.35	83.79	81.88	82.44
No	81.72	80.63	45.9782.9	81.71
F-Statistics	(0.253)	(6.642) **	(0.115)	(0.350)
b)Investment Accounts
Yes	95.27	95.31	94.96	95.29
No	95.35	95.23	95.56	95.24
F-Statistics	(0.002)	(0.016)	(0.778)	(0.006)
*P < 0.1, **P < 0.05 and***P < 0.01

Table 6. Result of logit regression models

	Personal Finance Opinion	Personal Finance Decision	Personal Financial Management Practices	Financial Behaviour
Financial Literacy	0.7562705***	−1.215365***	−0.1136637***	0.0590094 **
Rank1	−.0714976***	0.2767783***	−0.1052855***	−0.0625192***
Rank2	−.0677217***	0.1409501***	0.1045061	0.1163033
ShsStudy1	0.0115787	0.0634206***	0.0088532	0.013566
ShsStudy2	−0.0276682	0.1008815***	−0.026403	−0.0212876
Acc & Finance	0.0988209	−.1537568	.0694321	0.1385245
Unistudy	−0.2270281**	−0.1155807	−0.1614522	−0.2406255**
Male	1.66326	−1.45251	1.69464	1.84593
Exp1	.8265809	−1.022713	−2.001539 *	.6038059
Exp2	3.295748	−4.413138	−7.306936*	2.769863
Age 1	−.1151285	.0727742	−.2493676	−.0435676
Age2	−.0715633	.1874232	−.3637441***	−.0888677
Age3	.0083118	.074511	−.0344636	.0999012
Income1	.6466054	−.3080299	.3010816	.5258731
Income2	1.38409	−1.92773	1.08943	1.51786
FatherSch1	.0565095***	−.0461588**	−.0362085	.0313796
Fathersch2	.0593258***	.0127744	−.0101553	.0395912*
MotherSch1	.0260066	−.0100855	−.0036245	.0177192
MotherSch2	−.0094385	−.0266736	.0464324**	.0383615
FathOccu1	.0878708	−.07384	.1266994	.1264374
FathOccu2	−.1490095	.1708099	.0038327	−.0418367
MothOccu1	.3182756**	.331086**	−.1503251	−.1092543
MothOccu2	−.105725	.1209407	−.0117638	.0002681
Discusfinan2	.0087789	−.0609012	−.3417988***	−.2184141***
Drive	−.1040013	−.0915804	.0518635	−.02097
Capitaltown	.2830752***	−.3958023***	.0876649	.0789877
House1	.2841907*	.0752222	.1400959	.2914071**
House2	.4078996***	.1819244	.2766854**	.4477423***
House3	.3029462*	.2137327	.3447717**	.3469337**
Educfinan1	.1709889	−.177555	.4767369***	.5379663***
Educfinan2	.1320436	−.0117471	−.1553641	.0750648
Educfinan3	.4096765**	−.0420068	.1948566	.573733***
Personalac	.1409227	−.2457461	−.2016294	−.2708461
Investaccount	−.189034	−.0951151	.0386505	−.1281957
Intercept	−13.45702	14.7296	−10.12325	−12.13662
−2 log Likelihood	−2525.6027	−2398.6476	2587.321	−2618.2138
Wald Chi2 (14)	200.54	568.21	212.93	139.98
Prob>Chi2	0.0000	0.0000	0.0000	0.0000
Pseudo R2	0.0382	0.1059	0.0395	0.0260
Correct Classification	63.08%	67.02%	69.63%	67.55%
Chance Classification	72.31%	62.42%	73.04%	65.04%

*p < 0.1, **p < 0.05 and***p < 0.01