The Effect of Objective and Subjective Financial Knowledge on High-Cost Borrowing Behavior

다국어 초록 (Multilingual Abstract)

Using data from the 2009 National Financial Capability Study, this research explored the relationship between the use of high-cost debt instruments and measures of objective and subjective financial knowledge. Specifically, a series of logistic regression models were created to explore the correlates of utilizing payday loans, tax refund anticipation loans, pawn shops, and rent-to-own stores. Results indicate that objective financial knowledge levels, holding all else equal, were negatively associated with the use of each of these instruments. However, subjective financial knowledge was only found to be significantly related to payday loans and pawn shops. These results may indicate that, while subjective financial knowledge is important in predicting certain financial behaviors as shown in previous literature, objective financial knowledge may be a better predictor when investigating more complex behaviors and decisions. Additionally, concerns are reinforced about the ability of borrowers to evaluate the costs associated with the use of high-cost borrowing instruments.

목차 (Table of Contents)

• Ⅰ. Introduction
• Ⅱ. Literature Review
• Ⅲ. Methodology
• Ⅳ. Results
• Ⅴ. Discussion
• References

참고문헌 (Reference)

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