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Numeracy and Financial Literacy of Forest Dependent Communities Evidence from Andhra Pradesh

  • Sundar, B.
  • Virmani, Vineet
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    This study is an attempt to measure the numeracy and financial literacy of forest dependent communities (FDCs) in India using data from the two economically different forest communities in the state of Andhra Pradesh. In an attempt to rehabilitate degraded forests, the Government of India launched the joint forest management (JFM) program in 1990 with the involvement of FDCs. This has not only helped increase their income levels, but through interactions with and help of Government officials, have also given them a first-hand exposure to financial management at JFM. While there is some evidence on numeracy and financial literacy of urban and rural households and fishing communities in India, there is no evidence on numeracy and financial literacy of Indian FDCs. This study attempts to fill that gap by providing background on FDCs in two economically different regions of Andhra Pradesh (Rayalaseema and Coastal Andhra) and provides evidence on their numeracy and financial literacy. While the performance on both numeracy and financial literacy differs for the two regions, it is found that the participants scored better on numeracy skills than on financial literacy. It was found that while in general participants had difficulty in recognizing mathematical symbols for addition and multiplication and performing the corresponding operations, they were generally able to perform the same operations when orally instructed in their local language without difficulty. While the empirical evidence on financial literacy is less strong, roughly a third of the participants had some basic knowledge of economic concepts like simple interest and time value of money

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    Paper provided by Indian Institute of Management Ahmedabad, Research and Publication Department in its series IIMA Working Papers with number WP2013-09-02.

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    Handle: RePEc:iim:iimawp:12127
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    1. Annamaria Lusardi & Olivia S. Mitchell, 2008. "Planning and Financial Literacy: How Do Women Fare?," CeRP Working Papers 72, Center for Research on Pensions and Welfare Policies, Turin (Italy).
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    3. Annamaria Lusardi & Olivia S. Mitchell, 2011. "Financial Literacy and Planning: Implications for Retirement Wellbeing," NBER Working Papers 17078, National Bureau of Economic Research, Inc.
    4. Annamaria Lusardi & Olivia S. Mitchell, 2011. "Financial Literacy Around the World: An Overview," CeRP Working Papers 106, Center for Research on Pensions and Welfare Policies, Turin (Italy).
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    10. Sarthak Gaurav & Ashish Singh, 2012. "An Inquiry into the Financial Literacy and Cognitive Ability of Farmers: Evidence from Rural India," Oxford Development Studies, Taylor & Francis Journals, vol. 40(3), pages 358-380, September.
    11. Annamaria Lusardi & Olivia S Mitchelli, 2007. "Financial Literacy and Retirement Preparedness: Evidence and Implications for Financial Education," Business Economics, Palgrave Macmillan, vol. 42(1), pages 35-44, January.
    12. Annamaria Lusardi, 2012. "Numeracy, financial literacy, and financial decision-making," NBER Working Papers 17821, National Bureau of Economic Research, Inc.
    13. Angela A. Hung & Andrew M. Parker & Joanne K. Yoong, 2009. "Defining and Measuring Financial Literacy," Working Papers 708, RAND Corporation Publications Department.
    14. Klapper, Leora & Lusardi, Annamaria & Panos, Georgios A., 2012. "Financial literacy and the financial crisis," Policy Research Working Paper Series 5980, The World Bank.
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