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Using Multivariate Statistical Methods for Analysing Financial Literacy, as a Possible Appearance of Social Innovation

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  • Kitti Fodor

    (University of Miskolc)

Abstract

Financial literacy is an interesting research area. In this paper my aim is to answer three important questions about financial literacy with help of statistical methods. Can it be predicted whether a country has an appropriate level of financial literacy? Can homogenous groups be identified among the observed countries? Does the income group influence the level of financial literacy? For the prediction of financial literacy I used membership logistic regression. The two independent variables were the Human Development Index and Government expenditure on education (GDP%). I was able to achieve a classification accuracy of 88.5%. To answer my second question I created clusters and used Ward’s method to create five homogeneous groups. I identified one group with an extremely low level of financial literacy. To answer my third question I used the Chi-square test for Independence. During the analysis I came to the conclusion that financial literacy and income group are not independent of each other.

Suggested Citation

  • Kitti Fodor, 2020. "Using Multivariate Statistical Methods for Analysing Financial Literacy, as a Possible Appearance of Social Innovation," Theory Methodology Practice (TMP), Faculty of Economics, University of Miskolc, vol. 16(01), pages 11-18.
    • Handle: RePEc:mic:tmpjrn:v:16:y:2020:i:01:p:11-18
    as

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    File URL: http://tmp.gtk.uni-miskolc.hu/volumes/2020/01/TMP_2020_01_02.pdf
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    References listed on IDEAS

    as
    1. Adele Atkinson & Flore-Anne Messy, 2012. "Measuring Financial Literacy: Results of the OECD / International Network on Financial Education (INFE) Pilot Study," OECD Working Papers on Finance, Insurance and Private Pensions 15, OECD Publishing.
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    More about this item

    Keywords

    financial literacy; cluster; statistic; logistic regression;
    All these keywords.

    JEL classification:

    • G53 - Financial Economics - - Household Finance - - - Financial Literacy
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • O35 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Social Innovation

    Statistics

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