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Evaluation of a Financial Literacy Test Using Classical Test Theory and Item Response Theory

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  • Irina Kunovskaya
  • Brenda Cude
  • Natalia Alexeev

Abstract

The purpose of this study was to evaluate the quality (item difficulty and discriminability, construct validity, and reliability) of a financial literacy test that has been used to measure financial literacy in multiple countries. The test was analyzed based on Classical Test Theory and Item Response Theory, specifically the Rasch model, with the goal of identifying areas of improvement. The findings from the two measurement frameworks were quite comparable and identified similar measurement problems. Steps to improve the financial literacy measure were recommended. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Irina Kunovskaya & Brenda Cude & Natalia Alexeev, 2014. "Evaluation of a Financial Literacy Test Using Classical Test Theory and Item Response Theory," Journal of Family and Economic Issues, Springer, vol. 35(4), pages 516-531, December.
    • Handle: RePEc:kap:jfamec:v:35:y:2014:i:4:p:516-531
    DOI: 10.1007/s10834-013-9386-8
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    References listed on IDEAS

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    2. Gilles E. Gignac & Elizabeth Ooi, 2022. "Measurement error in research on financial literacy: How much error is there and how does it influence effect size estimates?," Journal of Consumer Affairs, Wiley Blackwell, vol. 56(2), pages 938-956, June.
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    4. Marc Oliver Rieger, 2020. "How to Measure Financial Literacy?," JRFM, MDPI, vol. 13(12), pages 1-14, December.

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