Financial literacy: a psychologist's perspective on an emerging societal problem in Australia

Fogarty, Gerard J. and MacCarthy, Karina (2006) Financial literacy: a psychologist's perspective on an emerging societal problem in Australia. In: Psychology Bridging the Tasman: Science, Culture and Practice, 26-30 Sep 2006, Auckland, New Zealand.

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In the past decade, researchers in New Zealand, the United States, and the United Kingdom have devoted considerable effort to monitoring financial literacy among adolescents and adults and concluded that almost half the population of those countries exhibit serious deficiencies in their understanding of everyday financial matters. Two recent surveys by Australian financial institutions indicate that the situation is no different in Australia, prompting the federal government to call for a concerted effort from all sections of the professional community to address this growing societal problem. To explore the psychological predictors of financial literacy, the present study administered tests of numeracy, general fluid (Gf), and general crystallised (Gc) intelligence to a sample of 126 adults. Despite the fact that the test was not intended to be difficult, 39% of the participants failed to achieve a pass mark. The demographic variables, level of education and annual income, explained 26% of the variance in scores with the cognitive ability measures contributing a further 15%. We conclude by outlining directions for future research and some possible ways in which the discipline of psychology can contribute to this emerging societal challenge.

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Item Type: Conference or Workshop Item (Commonwealth Reporting Category E) (Paper)
Refereed: Yes
Item Status: Live Archive
Additional Information: Author's version deposited according to Publisher's requirements: 'This is an electronic version of an article published in Katsikitis, Mary (Ed.) (2006). Proceedings of the 2006 Joint Conference of the Australian Psychological Society and the New Zealand Psychological Society: Psychology Bridging the Tasman: Science, Culture and Practice(pp. 115-119). Melbourne, Australia: Australian Psychological Society. ISBN 0-909881-30-8.'
Faculty / Department / School: Historic - Faculty of Sciences - Department of Psychology
Date Deposited: 11 Oct 2007 00:37
Last Modified: 02 Jul 2013 22:36
Uncontrolled Keywords: financial literacy; intelligence; abilities
Fields of Research : 16 Studies in Human Society > 1604 Human Geography > 160401 Economic Geography
17 Psychology and Cognitive Sciences > 1701 Psychology > 170109 Personality, Abilities and Assessment
14 Economics > 1402 Applied Economics > 140299 Applied Economics not elsewhere classified
Socio-Economic Objective: E Expanding Knowledge > 97 Expanding Knowledge > 970116 Expanding Knowledge through Studies of Human Society

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