IDEAS home Printed from https://ideas.repec.org/a/gam/jijfss/v12y2024i3p76-d1451209.html

Dealing with “Do Not Know” Responses in the Assessment of Financial Literacy: The Use of a Sample Selection Model

Author

Listed:
  • Anna Conte

    (Department of Statistical Sciences, Viale Regina Elena 295G, Sapienza University of Rome, 00161 Rome, Italy)

  • Paola Paiardini

    (Department of Management, Via del Castro Laurenziano 9, Sapienza University of Rome, 00161 Rome, Italy)

  • Jacopo Temperini

    (Department of Statistical Sciences, Viale Regina Elena 295G, Sapienza University of Rome, 00161 Rome, Italy)

Abstract

Financial literacy assessments typically rely on sample surveys containing sets of questions designed to gauge respondents’ comprehension of fundamental financial concepts necessary for making informed decisions. The answers to such questions, either categorical or continuous in nature, generally include a “Do not know” option. If those who choose the “Do not know” option are not a random sample of the population but exhibit peculiar characteristics, treating these observations as either incorrect responses or as missing data may distort the results regarding the determinants of financial literacy. A noteworthy case lies in the observation from survey studies that women tend to choose the “Do not know” option more frequently than men. In similar cases, treating the “Do not know” responses as incorrect answers increases the gender gap in financial literacy while treating them as missing values reduces the gap. We propose using a model with sample selection, which enables us to disentangle the inclination to answer “Do not know” from actual responses. By applying this model to a representative sample of the UK population, we do not find any systematic gender gap in financial knowledge. The study’s novel treatment of “Do not know” responses contributes valuable insights to the broader discourse on the determinants of financial literacy and the related gender-based differences.

Suggested Citation

  • Anna Conte & Paola Paiardini & Jacopo Temperini, 2024. "Dealing with “Do Not Know” Responses in the Assessment of Financial Literacy: The Use of a Sample Selection Model," IJFS, MDPI, vol. 12(3), pages 1-29, August.
    • Handle: RePEc:gam:jijfss:v:12:y:2024:i:3:p:76-:d:1451209
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7072/12/3/76/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7072/12/3/76/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Annamaria Lusardi, 2019. "Financial literacy and the need for financial education: evidence and implications," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 155(1), pages 1-8, December.
    2. Charness, Gary & Gneezy, Uri, 2012. "Strong Evidence for Gender Differences in Risk Taking," Journal of Economic Behavior & Organization, Elsevier, vol. 83(1), pages 50-58.
    3. Philomena M. Bacon & Anna Conte & Peter G. Moffatt, 2024. "Gender and gambling preference," Applied Economics, Taylor & Francis Journals, vol. 56(4), pages 426-439, January.
    4. Joanne W. Hsu & Robert Willis, 2013. "Dementia Risk and Financial Decision Making by Older Households: The Impact of Information," Journal of Human Capital, University of Chicago Press, vol. 7(4), pages 340-377.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Anna Conte & Paola Paiardini & Jacopo Temperini, 2025. "Dash and dine, for tomorrow we dice," Journal of Risk and Uncertainty, Springer, vol. 71(2), pages 179-201, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Apiag, Claire Anne D. & Aquino, Michael P. & Cadungog, Nicole Shaine B. & Fuentes, Mary Joanne Jurika A. & Gorgonio, Althea Reann F. & Llamo, Xenia Flor D. & Manalo, Ariana Jemar B. & Orillo, Davie Ma, 2025. "Financial Literacy and Insurance Uptake Intention among Rural Area Families," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(4), pages 1636-1661, April.
    2. Ertac, Seda & Gumren, Mert & Gurdal, Mehmet Y., 2020. "Demand for decision autonomy and the desire to avoid responsibility in risky environments: Experimental evidence," Journal of Economic Psychology, Elsevier, vol. 77(C).
    3. Fereshteh Mahmoudian & Johnny Jermias, 2022. "The influence of governance structure on the relationship between pay ratio and environmental and social performance," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 2992-3013, November.
    4. Lim Soyoung & Jung Hongjoo, 2025. "Determinants of Insurance and Insurer Preferences Among Financial Consumers in ASEAN: Evidence from Myanmar, Vietnam, and Indonesia," International Review of Financial Consumers, Sciendo, vol. 10(2), pages 38-52.
    5. Leanne Roncolato & Alex Roomets, 2020. "Who will change the “baby?” Examining the power of gender in an experimental setting," Review of Economics of the Household, Springer, vol. 18(3), pages 823-852, September.
    6. Bannier, Christina E. & Neubert, Milena, 2016. "Gender differences in financial risk taking: The role of financial literacy and risk tolerance," Economics Letters, Elsevier, vol. 145(C), pages 130-135.
    7. Buser, Thomas & Ranehill, Eva & van Veldhuizen, Roel, 2021. "Gender differences in willingness to compete: The role of public observability," Journal of Economic Psychology, Elsevier, vol. 83(C).
    8. van Rijn, Jordan, 2018. "The Effect of Membership Expansion on Credit Union Risk and Returns," Staff Paper Series 588, University of Wisconsin, Agricultural and Applied Economics.
    9. Kessel, Dany & Mollerstrom, Johanna & van Veldhuizen, Roel, 2021. "Can simple advice eliminate the gender gap in willingness to compete?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 138, pages 1-1.
    10. Basty, Nadia & Ghazouani, Ines & Jeriji, Maher, 2023. "How macroprudential regulation and board effectiveness interact to shape bank risk-taking behavior," Research in International Business and Finance, Elsevier, vol. 66(C).
    11. Mario Daniele Amore & Orsola Garofalo & Alessandro Minichilli, 2014. "Gender Interactions Within the Family Firm," Management Science, INFORMS, vol. 60(5), pages 1083-1097, May.
    12. Beatty, Timothy K.M. & Katare, Bhagyashree, 2018. "Low-cost approaches to increasing gym attendance," Journal of Health Economics, Elsevier, vol. 61(C), pages 63-76.
    13. Yi, Jing & Richardson, James & Bryant, Henry, 2016. "How Do Premium Subsidies Affect Crop Insurance Demand at Different Coverage Levels: the Case of Corn," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236249, Agricultural and Applied Economics Association.
    14. Celse, Jeremy & Karakostas, Alexandros & Zizzo, Daniel John, 2023. "Relative risk taking and social curiosity," Journal of Economic Behavior & Organization, Elsevier, vol. 210(C), pages 243-264.
    15. Schmidt, Ulrich & Friedl, Andreas & Lima de Miranda, Katharina, 2015. "Social comparison and gender differences in risk taking," Kiel Working Papers 2011, Kiel Institute for the World Economy.
    16. Raziiakhan Abdieva & Burulcha Sulaimanova & Kamalbek Karymshakov, 2019. "Gender differences, risk attitude and entrepreneurship in Kyrgyzstan," Economics and Business Letters, Oviedo University Press, vol. 8(1), pages 17-30.
    17. Dileni Gunewardena & Abdoulaye Seck, 2020. "Heterogeneity in entrepreneurship in developing countries: Risk, credit, and migration and the entrepreneurial propensity of youth and women," Review of Development Economics, Wiley Blackwell, vol. 24(3), pages 713-725, August.
    18. Cupák, Andrej & Fessler, Pirmin & Schneebaum, Alyssa, 2021. "Gender differences in risky asset behavior: The importance of self-confidence and financial literacy," Finance Research Letters, Elsevier, vol. 42(C).
    19. Goran Calic & Moren Lévesque & Anton Shevchenko, 2024. "On why women-owned businesses take more time to secure microloans," Small Business Economics, Springer, vol. 63(3), pages 917-938, October.
    20. Francisco Díez-Martín & Giorgia Miotto & Cristina Del-Castillo-Feito, 2024. "The intellectual structure of gender equality research in the business economics literature," Review of Managerial Science, Springer, vol. 18(6), pages 1649-1680, June.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jijfss:v:12:y:2024:i:3:p:76-:d:1451209. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.