Making Sense of Financial Capability
Surveys around the World
A Review of Existing Financial Capability and Literacy
Measurement Instruments
The World Bank
Siegfried Zottel/Valeria Perotti
RBI-OECD-World Bank Regional Conference on Financial Education
New Delhi, 4-5 March, 2013
Purpose of the Review
Guide policy makers on existing measurement
instruments
o Useful for policy makers who prioritize Fin. Capability,
Fin. Inclusion or Fin. Consumer Protection
o
o
Describe and compare key instruments that are:
• Innovative
• Focused on demand-side (household vs. business)
• Well established
• Well documented
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Surveys Reviewed
Jump$tart
FSA
Consumer
Awareness
FinScope
Findex
Consumer
Fraud US
UK FSA
WB FCCP
Eurobarometer
Portugal
Survey of
Consumers
US Health &
Retirement
Study
OECD/INFE
Financial
Diaries
CP
Kenya
Ghana
FSS
Singapore
Fiji
Kenya
FinAccess
WB/Russia FLIT
New
Zealand
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Content of the review
Key questions addressed by the review:
o
1.
2.
3.
4.
How can a survey support policy making?
What do these surveys measure and how?
How can a survey be implemented properly?
How to analyze and present the data to inform policy?
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1. How can a survey support policy
making?
Capability
Inclusion
Consumer
Protection
• Baseline assessment of weak areas/targets
• Identify potential channels for info or FE
• Understand behavior related with personal or
household finances
• Understand knowledge/behavior relationship
• Determine what products people use
• Understand reasons for limited use
• Understand how people use information
• Understand attitudes towards fin. issues
• Assess awareness of CP laws, mechanisms
• Identify potential victims of fraud
• Assess attitudes and trust in providers and
regulators
2. What do these surveys measure and
how?
Financial Capability
Knowledge of
financial concepts
Awareness of
financial products
and services
Questions on…
inflation
compound interest
budgeting
returns on investment
insurance
money illusion
Risk diversification
Practical
Know-how
Financial Capability
Knowledge of
financial concepts
Awareness of
financial products
and services
Practical
Know-how
Questions on…
Awareness of product existence
Basic product features
Advantages of using products
Risks and costs
Financial Capability
Knowledge of
financial concepts
Awareness of
financial products
and services
Practical
Know-how
Questions on…
How to make payments
How to set up a budget
How to keep financial records
How to open a bank account
How to seek for recourse
Financial Capability
Behavior
Attitudes
Questions on…
Paying bills on time
Budgeting
Saving
Overspending
Making choices
Planning for old age
Borrowing
Dealing with unexpected expenses/income loss
Financial Capability
Behavior
Attitudes
Questions on…
Reasons for or for not saving, borrowing, investing,
budgeting, and choosing specific financial products
Attitudes toward impulse purchases
Attitudes towards the future
Propensity to save
Confidence in own retirement plans
Financial Inclusion
Behavior
Questions on…
Types and number of financial products used
Frequency and modality of use
What products are used for
Ways of accessing financial services
Attitudes
Financial Inclusion
Behavior
Attitudes
Questions on…
Perceptions on service accessibility
Barriers in accessing services
Reasons for/for not using specific financial products
Reasons for changing a product
Consumer Protection
Behavior
Attitudes
Experience
Questions on…
Actions taken to resolve issues with fin. service providers
Where complaints were filed
Entities consulted in case of disagreement
Consumer Protection
Behavior
Attitudes
Experience
Questions on…
Satisfaction with financial products and service providers
Trust in service providers
Confidence in resolving disputes
Perceptions on financial regulators and supervisors
Consumer Protection
Behavior
Attitudes
Experience
Questions on…
Experience with pyramid schemes
Being billed for a service not received/product not requested
4. How can a survey be implemented
properly?
Main approaches for survey implementation
o
Who should be interviewed?
• Individual vs. household
o
How to ensure comparability over time?
• Repeated cross-section vs. panel survey
• Panel surveys are more time resource-intensive
• Use same questions (make sure they are still
meaningful!)
• Employ consistent sampling methodology
o
How to ensure comparability across countries?
• Coordinated joint efforts by all countries involved
• Replicating what has been done (requires caution!) 19
How can data quality be ensured?
o
Developing a well-tested questionnaire
•
•
•
•
Reviews of existing surveys
Experts groups
Qualitative testing (focus groups, cognitive interviews)
Quantitative testing (pilot surveys)
Sampling design
o Mode of interview
o
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5. How to analyze and present the data to
inform policy?
Main approaches for data analysis
o
How to develop indicators?
• Frequencies and proportions of individual questions
• Combining data by creating composite scores (e.g.
sum of correctly answered fin knowledge questions)
• Weighted scores
• Factor analysis
o
How to identify potential target groups?
•
•
•
•
Use cross-tabulations
Regressions
Segmentation (by ranking people according to scores)
Cluster analysis
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THANK YOU!
Contacts:
vperotti@worldbank.org
szottel@worldbank.org
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