Financial Decision-Making among Finance Students: An Empirical Study from the Czech Republic

Authors: Barbora Chmelíková

Abstract:

Making sound financial decisions is an essential skill which can have an impact on life of each consumer of financial products. The aim of this paper is to examine decision-making concerning financial matters and personal finance. The selected target group was university students majoring in finance related fields. The study was conducted in the Czech Republic at Masaryk University in 2015. In order to analyze financial decision-making questions related to basic finance decisions were developed to address the research objective. The results of the study suggest gaps in detecting best solutions to given financial decision-making questions among finance students. The analysis results indicate relation between financial decision-making and own experience with holding and using concrete financial products.

Keywords: Financial decision-making, financial literacy, personal finance, university students.

Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1128125

References:

[1] A. Atkinson, and F. Messy, Measuring Financial Literacy: Results of the OECD / International Network on Financial Education (INFE) Pilot Study, OECD Working Papers on Finance, Insurance and Private Pensions, No. 15, OECD Publishing, Paris, 2012.
[2] T. Bucher-Koenen, A. Lusardi, R. Alessie, and M. van Rooij, "How Financially Literate Are Women? An Overview and New Insights," NBER Working Papers, pp. 3-33, 2014.
[3] C. Bumcrot, J. Lin, and A. Lusardi, "The Geography of Financial Literacy," Numeracy: Advancing Education in Quantitative Literacy, vol. 6: Issue 2, pp.1-26, 2013.
[4] G.L. Clark, “Roepke Lecture in Economic Geography--Financial Literacy in Context,” Economic Geography, vol. 90 Issue 1, pp.1-23, 2014.
[5] M. Cull, D. Whitton. University Students’ Financial Literacy Levels: Obstacles and Aids. Economic and Labour Relations Review. Vol. 22, Issue. 1, pp. 99-114, 2011.
[6] A. Hung, J. Yoong, and E. Brown, “Empowering Women Through Financial Awareness and Education”, OECD Working Papers on Finance, Insurance and Private Pensions, No. 14, OECD Publishing, Paris, 2012.
[7] K. Huzdik, D. Béres, E. Németh. An Empirical Study of Financial Literacy versus Risk Tolerance Among Higher Education Students. Public Finance Quarterly. Vol. 59 Issue 4, pp.444-456, 2014.
[8] E. Kempson. Framework for the Development of Financial Literacy Baseline Surveys: A First International Comparative Analysis. OECD Working Papers on Finance, Insurance and Private Pensions. No. 1. Paris: OECD Publishing, 2009.
[9] E. Kempson, V. Perotti, K. Scott, Measuring Financial Capability: A New Instrument and Results from Low- and Middle-Income Countries, World Bank, 2013.
[10] E. Kempson, V. Perotti, K. Scott, Measuring Financial Capability: Questionnaire and Implementation Guidance for Low- and Middle-income Countries. World Bank, 2013
[11] A. Luksander, D. Béres, K. Huzdik, E. Németh, “Analysis of the Factors that Influence the Financial Literacy of Young People Studying in Higher Education,” Public Finance Quarterly (0031-496X), vol. 59, Issue 2, pp. 220-241, 2014.
[12] OECD/INFE, Toolkit for Measuring Financial Literacy and Financial Inclusion, OECD Publishing, Paris, 2015.
[13] A. Özdemir, F. Temizel, H. Sönmez and F. Er, “Financial Literacy of University Students: A Case Study for Anadolu University, Turkey,” International Journal of Management Economic, vol. 11, Issue 24, pp. 97-110, 2015.
[14] Shambare, R. and Rugimbana, R. Financial Literacy Among the Educated: An Exploratory Study of Selected University Students in South Africa. Thunderbird International Business Review. Vol. 54, Issue 4, pp. 581-590, 2012.
[15] Shim, S., Serido, J. and Xiao, J. Arizona Pathways to Life Success for University Students: Cultivating Positive Financial Attitudes and Behaviors for Healthy Adulthood. The University of Arizona, 2009.
[16] Shim, S., and Serido, J. Life After College: Drivers for Young Adult Success. The University of Arizona, 2014.
[17] B.A. Tannahill, “The Role of Financial Literacy in Retirement Decision Making,” Journal of Financial Service Professionals, vol. 66, Issue 2, pp.32-35, 2012.
[18] V. Vyvyan, L. Blue and M. Brimble, “Factors that Influence Financial Capability and Effectiveness: Exploring Financial Counsellors' Perspectives,” Australasian Accounting Business, vol. 8 Issue 4, pp. 3-21, 2014.
[19] J. Xiao, S. Ahn, J. Serido and S. Shim, “Earlier financial literacy and later financial behaviour of college students,”International Journal of Consumer Studies, vol. 38, Issue 6, pp.593-601, 2014.
[20] World Bank, A Toolkit for the Evaluation of Financial Capability Programs in Low- and Middle-Income Countries, 2013.
[21] World Bank, Financial Capability Surveys Around the World, 2013.
[22] World Bank, The Global FINDEX Database, 2014.
[23] L. Xu, B. Zia, “Financial literacy around the world: An Overview of the Evidence with Practical Suggestions for the Way Forward,” World Bank Policy Research Working Paper, No. 6107, 2012.