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Do more financially literate households invest less in housing? Evidence from Italy

Author

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  • Riccardo Calcagno
  • Maria Cesira Urzì Brancati

Abstract

Using the Bank of Italy’s Survey of Household Income and Wealth (SHIW) covering a 5-year panel, we measure the impact of the degree of households’ financial literacy on their portfolio imbalance towards housing investment. We find that households with higher levels of financial literacy hold a relatively lower share of illiquid wealth, and the results are more pronounced at older ages, when according to the lifecycle hypothesis they are meant to decumulate their assets. Results appear robust to different specifications of the dependent variable and potential endogeneity of financial literacy.

Suggested Citation

  • Riccardo Calcagno & Maria Cesira Urzì Brancati, 2013. "Do more financially literate households invest less in housing? Evidence from Italy," Carlo Alberto Notebooks 297, Collegio Carlo Alberto.
    • Handle: RePEc:cca:wpaper:297
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    2. Mariacristina Rossi & Dario Sansone, 2018. "Precautionary savings and the self-employed," Small Business Economics, Springer, vol. 51(1), pages 105-127, June.
    3. Marianna Brunetti & Costanza Torricelli, 2012. "Second Homes: Households' Life Dream or (Wrong) Investment?," CEIS Research Paper 351, Tor Vergata University, CEIS, revised 04 Aug 2012.
    4. Marianna Brunetti & Costanza Torricelli, 2012. "Second Homes: Households' Life Dream or (Wrong) Investment?," CEIS Research Paper 351, Tor Vergata University, CEIS, revised 04 Aug 2012.
    5. Asmare, Fissha & Giedraitis, Vincentas & Jaraitė, Jūratė & Kažukauskas, Andrius, 2023. "Energy-related financial literacy and retrofits of Soviet-era apartment buildings: The case of Lithuania," Energy Economics, Elsevier, vol. 120(C).

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    Keywords

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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