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Financial literacy, information flows, and caste affiliation: Empirical evidence from India

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  • Bönte, Werner
  • Filipiak, Ute

Abstract

This paper empirically investigates the relevance of social interaction and caste affiliation for individual awareness of financial instruments and investment behavior of households in India. The results of our empirical analysis, which is based on a large scale survey on saving patterns of Indians, suggest a positive relationship between financial literacy and social interaction. However, especially backward caste people living in regions with a large fraction of backward castes have a lower probability of being aware of various financial instruments. In contrast, we find only weak empirical evidence for a direct effect of caste affiliation and social interaction on investment behavior.

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  • Bönte, Werner & Filipiak, Ute, 2012. "Financial literacy, information flows, and caste affiliation: Empirical evidence from India," Journal of Banking & Finance, Elsevier, vol. 36(12), pages 3399-3414.
    • Handle: RePEc:eee:jbfina:v:36:y:2012:i:12:p:3399-3414
    DOI: 10.1016/j.jbankfin.2012.07.028
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    More about this item

    Keywords

    Financial literacy; Social interaction; Social networks; Indian caste system;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • Z1 - Other Special Topics - - Cultural Economics

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