Debt literacy, financial experiences, and overindebtedness
Bibliographic Data
| ID | 23325621 |
|---|---|
| Authors | Annamaria Lusardi (0000-0002-2378-7489, George Washington University), Peter Tufano (University of Oxford) |
| Year | 2015 |
| Volume | 14 |
| Issue | 4 |
| Pages | 332-368 |
| Publication date | 2015-10-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Journal of Pension Economics and Finance (JOURNAL) |
| Journal identifiers | ISSN: 1474-7472 • E-ISSN: 1475-3022 |
| Publisher | Cambridge University Press (CUP) (PUBLISHER) |
| DOI | 10.1017/s1474747215000232 |
| OpenAlex | W2166096872 |
| Language | EN |
| Citations received | 108 |
| References cited | 26 |
We analyze a national sample of Americans with respect to their debt literacy, financial experiences, and their judgments about the extent of their indebtedness. Debt literacy is a component of broader financial understanding that measures knowledge about debt and self-assessed financial knowledge. Financial experiences are the participants’ reported experiences with traditional borrowing, alternative borrowing, and investing. Overindebtedness is a self-reported measure. Debt literacy is low, with only about one-third of the population grasping the basics of interest compounding. Even after controlling for demographics, we find a relationship between debt literacy and both financial experiences and debt loads. Individuals with lower levels of debt literacy tend to transact in high-cost manners, incurring higher fees and using high-cost borrowing. We provide a rough estimate of the national implications of debt ignorance on credit card costs by consumers. Less knowledgeable individuals also report that their debt loads are excessive or that they are unable to judge their debt position.
Business · Debt · Economics · Financial literacy · Ignorance · Monetary economics · Political science · Population · Position (finance) · Sociology · Demography · Finance · Financial Literacy, Pension, Retirement Analysis · Housing Market and Economics · Retirement, Disability, and Employment
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| Unique citing works | 108 |
|---|---|
| Citations per year | 5,68 |
| Citation span | 2007 - 2026 (20) |
| Citation velocity | current |
| Highly cited | Yes |
| Citation types | Neutral: 90 |