The literature documents robust evidence of a gender gap in financial literacy: Women consistently show lower levels of financial literacy than men. We have devised two surveys to investigate whether this gender gap is the result of lack of knowledge or lack of confidence. Our findings show that women are less confident in their knowledge than men. They disproportionately answer “do not know” to financial knowledge questions,even if they know the correct answer. We develop an empirical strategy based on a latent class model to consistently estimate whether the respondent knows the correct answer. An important implication of our findings is that traditional financial literacy measures are plagued by confidence bias or measurement error. Using the corrected measuresfor financial literacy, we show that financial knowledge is important to explain household financial behavior such as stock market participation.
Dieser Datensatz wurde nicht während einer Tätigkeit an der Universität Mannheim veröffentlicht, dies ist eine Externe Publikation.
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