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Give mind to the gap: Measuring gender differences in financial knowledge

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  • Elizabeth Ooi

Abstract

Prior research consistently finds a gender gap in financial knowledge where males appear to outperform females. Despite the wealth of studies attempting to explain this gap, none have considered whether the gender gap may be a product of measurement method. This study re‐examines the gender gap with item response theory (IRT) which can account for guessing behavior and differential item functioning. Survey data on 184,869 individuals from 39 countries and territories is analyzed. Results show that when IRT is employed, a gender gap exists in only 54% of the sample. In contrast, when a conventional measurement approach is used, there is a gender gap in financial knowledge in 81% of the sample. These results reveal that prior measurements may underestimate women's financial knowledge and inflate the gender gap.

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  • Elizabeth Ooi, 2020. "Give mind to the gap: Measuring gender differences in financial knowledge," Journal of Consumer Affairs, Wiley Blackwell, vol. 54(3), pages 931-950, September.
    • Handle: RePEc:bla:jconsa:v:54:y:2020:i:3:p:931-950
    DOI: 10.1111/joca.12310
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    2. Sophie Duncan‐Shepherd & Kathy Hamilton, 2022. "“Generally, I live a lie”: Transgender consumer experiences and responses to symbolic violence," Journal of Consumer Affairs, Wiley Blackwell, vol. 56(4), pages 1597-1616, December.
    3. Susanna Levantesi & Giulia Zacchia, 2021. "Machine Learning and Financial Literacy: An Exploration of Factors Influencing Financial Knowledge in Italy," JRFM, MDPI, vol. 14(3), pages 1-21, March.
    4. Rachel M. Okamoto & Matthew T. Saxey & Jocelyn S. Wikle & Ashley B. LeBaron-Black, 2024. "Confident Commitment: Financial Self-Efficacy’s Indirect Association with Romantic Relationship Flourishing Through Financial Behaviors," Journal of Family and Economic Issues, Springer, vol. 45(1), pages 35-44, March.
    5. Andrzej Cwynar, 2021. "Do Women Behave Financially Worse than Men? Evidence from Married and Cohabiting Couples," Central European Business Review, Prague University of Economics and Business, vol. 2021(5), pages 81-98.

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