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Exponential growth bias and financial literacy
Stockholm University, Faculty of Social Sciences, The Swedish Institute for Social Research (SOFI).
2012 (English)In: Applied Economics Letters, ISSN 1350-4851, E-ISSN 1466-4291, Vol. 19, no 17, 1693-1696 p.Article in journal (Refereed) Published
Abstract [en]

The tendency to underestimate the future value of a variable growing at a constant rate, an example of exponential growth bias, has been linked to household financial decision-making. We show that exponential growth bias and standard measures of financial literacy are negatively correlated in a representative sample of Swedish adults. Since financial literacy is linked to household decision-making, our results indicate that examining the relationship between exponential growth bias and household finance without adequate controls for financial literacy may generate biased results.

Place, publisher, year, edition, pages
2012. Vol. 19, no 17, 1693-1696 p.
Keyword [en]
exponential growth bias, financial literacy, household finance, survey data
National Category
Sociology Economics and Business
URN: urn:nbn:se:su:diva-79705DOI: 10.1080/13504851.2011.652772ISI: 000302502800008OAI: diva2:552535


Available from: 2012-09-14 Created: 2012-09-11 Last updated: 2012-09-14Bibliographically approved

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Gerdes, Christer
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ReferencesLink to record
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