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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.

Suggested Citation

  • 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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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Filipiak, Ute, 2016. "Trusting financial institutions: Out of reach, out of trust?," The Quarterly Review of Economics and Finance, Elsevier, vol. 59(C), pages 200-214.
    2. Kiliyanni, Abdul Latheef & Sivaraman, Sunitha, 2016. "The perception-reality gap in financial literacy: Evidence from the most literate state in India," International Review of Economics Education, Elsevier, vol. 23(C), pages 47-64.
    3. Calcagno, Riccardo & Monticone, Chiara, 2015. "Financial literacy and the demand for financial advice," Journal of Banking & Finance, Elsevier, vol. 50(C), pages 363-380.
    4. repec:kap:jfsres:v:52:y:2017:i:1:d:10.1007_s10693-017-0279-0 is not listed on IDEAS
    5. Ute Filipiak & Yabibal M. Walle, 2015. "The Financial Literacy Gender Gap: A Question of Nature or Nurture?," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 176, Courant Research Centre PEG.
    6. repec:eee:pacfin:v:43:y:2017:i:c:p:218-237 is not listed on IDEAS
    7. Shen, Chung-Hua & Lin, Shih-Jie & Tang, De-Piao & Hsiao, Yu-Jen, 2016. "The relationship between financial disputes and financial literacy," Pacific-Basin Finance Journal, Elsevier, vol. 36(C), pages 46-65.
    8. Audretsch, David B. & Bönte, Werner & Tamvada, Jagannadha Pawan, 2013. "Religion, social class, and entrepreneurial choice," Journal of Business Venturing, Elsevier, vol. 28(6), pages 774-789.
    9. Rashmi Baura & Renuka Sane, 2014. "Repayment in microfinance: The Role of financial literacy and caste," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 14-06, Indian Statistical Institute, New Delhi, India.
    10. Philip Kostov & Thankom Arun & Samuel Annim, 2014. "Financial Services to the Unbanked: the case of the Mzansi intervention in South Africa," Contemporary Economics, University of Finance and Management in Warsaw, vol. 8(2), June.

    More about this item

    Keywords

    Financial literacy; Social interaction; Social networks; Indian caste system;

    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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