This thesis will focus on studying factors that affect the FL of the poor in rural areas of Vietnam including the reflection factors - the components of the FL, as well as the impact ass
Trang 1INTRODUCTION
1 Rationale
Recently, comprehensive finance has been considered to be an important
pillar of economic growth, financial promotion and sustainable poverty
reduction It becomes the priority focus of many countries around the world It
can be seen that Financial Literacy (FL) has a positive impact on poverty
reduction through increasing people's income - especially in developing
countries or in transitioning economies The research of FL is mostly conducted
in OECD countries or only countries such as the US and European Union
countries From the measurement results, previous studies have brought out
several major policy implications, which emphasize the establishment of saving
habits for low-income people in the surveyed areas However, these studies
mostly ignore economies in East Asia and Southeast Asia (except Japan and
Singapore), which have a different cultural background from Western countries
While (1) Confucianism and Buddhism heavily influence culture in East Asia
and Southeast Asia, the relationships of each family member are reliable, and
the spending decisions (showing a part of the Financial Literacy) depends
heavily on the opinion of surrounding people; (2) Having the habit of saving
more than consumption These completely different demographic characteristics
have led to two problems The first one is the failure to understand the
questionnaires of East Asian and Southeast Asian people compared to Western
countries, from which it is impossible to assess FL accurately, and also not
determining the specific influencing factors The second is policy implications
related to FL development cannot be implemented such as training on saving
money in low-income areas - because the savings ratio of the people here
(compared to income) is very high!
In Vietnam, FL is mentioned in a small number of studies and often focuses
on "financial training" rather than FL or assessing the impact of FL on the
income of surveyed group However, it is evident that: in poor areas, even
people have good financial knowledge but income is still low because the
financial attitude and behavior of this group are not high The poor in rural areas
have limited access to these services, and the behavior and use of these services
are highly vague
This thesis will focus on studying factors that affect the FL of the poor in rural areas of Vietnam (including the reflection factors - the components of the FL), as well as the impact assessment of FL to income At the same time, the thesis gives policy implications for the FL development of the poor in rural areas in order to achieve the goal of sustainable economic development In order
to accomplish this goal, the thesis will use a unified FL concept and adjust the measurement method to suit the research object Therefore, this will be an additional source of both theory and practice for the FL research branch in Vietnam and the world
2 Research objectives and research missions
Research subjects
Finding the factors affect to FL of the poor in Vietnam rural area, then provide some implications to develop FL of this one
Research missions
To answer the above questions, the author's research objectives will focus on the following issues:
• Research about the factors that can affect the FL of the poor in rural areas
in Vietnam, including the reflection factors
• Measuring the impact of FL level on the income of the poor in rural Vietnam
• Provide policy implications after comparing the components and factors affecting the FL in rural areas of Vietnam
3 Research questions
This research topic answers the following questions:
• What are factors other than demographic factors affecting FL of the poor
in rural areas of Vietnam? What effect does each of the financial components itself (including financial attitudes, financial behavior and financial knowledge) have on FL?
• How does FL affect the income of the poor in rural Vietnam (through income criteria of individuals and households)?
• What policy implications should be proposed to improve the FL of the poor in rural Vietnam?
Trang 24 Research objectives and research scope
Research scope: focus on FL of the poor in rural
Research scopes
The study subjects are the financial literacy of the poor in rural areas of
Vietnam These individuals must meet both of the time conditions: (1) have at
least half of the current time living in the countryside; (2) in 1 year, they must
have at least 6 months living in rural areas
5 Research approach
The author based on the original theories of economics, during the 1980s and
1990s, the Washington Concencus group of scholars developed a perspective on
access to comprehensive financial and financial services, enabling individuals to
invest or better use of services on the market, thereby helping to promote the
development of a free economy The thesis will approach the research direction
from the demand side of financial services
Besides, this thesis also approaches in terms of sustainable livelihoods and
human capital, because sustainable livelihoods are developed based on the
theory of poverty reduction, and set people as the centre of Sustainable
Development issue
CHAPTER 1: LITERATURE REVIEWON FINANCIAL LITERACY 1.1 The study of behavioral finance
Because FL consists of three aspects: financial knowledge, financial attitude and financial behavior, which is relevant to behavioral finance studies - used to explain the behavior of investors (after having acquired financial knowledge) in the market, especially the stock market as well as investments in other markets Behavioral financial studies have shown that when individuals make financial decisions often:
Firstly, there is a tendency to appreciate the possibility of making up a loss rather than making a lot of profit
Secondly, there is a tendency to divide decisions into separated "virtual accounts" in the brain instead of combining them into one unified whole and often handling these decisions independently, not paying attention to their correlation
1.2 The study of microfinance
For the poverty research branch and measures to reduce poverty by providing financial support, this is an important research branch However, microfinance does not have a clear theoretical background It must rely on the following research branches:
Initially, it is the research branch of knowledge training for people (including financial training to form financial knowledge) and demonstrates that
research believed that without human development, it is difficult to develop sustainable economy, because, without the human factor, it is impossible to use physical capital effectively For example, land or machines still have to be
"operated" by humans
The second research branch on which microfinance is based in the research
is developed based on research on poverty reduction In the studies of this group, most authors agree: the main points of sustainable livelihoods include: (1) individuals and households use current resources (human, financial, natural, physical and social elements) in response to changes in nature and markets in order to achieve sustainable livelihoods (2) People are the core elements of a sustainable livelihood framework Thus, in order to have a livelihood
Trang 3framework, the government must provide subsidized programs related to the
establishment of a capacity to develop production and business activities for the
poor in long-term This research group is the main foundation of microfinance
(3) Since human beings are a central issue in livelihoods, poverty reduction must
aim to provide individuals in the economy with a solid institution, environment,
society and economy, which must include educational elements about finance
and ways of living
1.3 The study of Financial Literacy
Because of the inconsistency in the intrinsic of FL, the study of FL is usually
not divided into schools, but it can be divided into small groups: (1) studying the
factors that affect the FL; (2) the impact of FL on income
1.4 Research gaps
between the factors reflecting FL - that is, FL itself is composed of 3 elements:
Financial attitude, financial behavior and financial knowledge - and how these
three reflect on FL Because of that, there has been a gap in the approach to
assessing financial literacy
Secondly, the analysis and presentation of assessing results of researches
focus heavily on qualitative analysis
Thirdly, Vietnam's unique characteristics affecting FL have not been
mentioned in published studies
CHAPTER 2: THEORETICAL FRAMEWORK OF FINANCIAL LITERACY OF THE POOR IN RURAL AREAS 2.1 Viewpoints on the poor in rural areas
2.1.1 Viewpoints on rural areas
The rural area consists of communes of districts after adjustment of administrative boundaries to avoid the situation of individuals in urban areas
In addition, individuals in rural areas in this thesis are understood as those who have permanent residence in rural areas and have a residence time in the locality of at least 6 months/year This is to avoid the issues of individuals living far away for studying purpose (in the case of students participating in education
at educational institutions); or whose income is not earned from rural areas
exceed VND 700,000 / person / month or VND 1,000,000 / person / month when lacking 3 of the following 5 criteria: health; education; house; clean water and sanitation; information
Thus, based on the perspectives on financial literacy, poverty and rural areas,
in this dissertation, the author conceives that FL is composed of three parts:
financial knowledge, financial attitude major and financial behavior The Financial Literacy of the poor in rural areas is understood as the application of financial knowledge and financial attitudes to the financial behaviors of those who are in the absolute poverty line and have a period of residence in the rural region that ensures two conditions (1) at least half of the current living time are
in the countryside and (2) in 1 year, at least 6 months is living in the countryside
2.2 Financial literacy of the poor in the rural area
2.2.1 Concept of Financial Literacy of the poor in rural area
OECD (2013) defines FL as the combination of awareness, knowledge, skills, attitudes, and behaviors needed to make financial decisions and ultimately achieve personal “financial wealth” Combining from the above studies, the definition of FL is more developed in recent years Others define FL as a combination of an individual's perceptions, attitudes, and skills of individuals in financial matters
In summary, FL will cover 3 aspects: financial knowledge, financial attitude
Trang 4and financial behavior
2.2.2 Content of Financial Literacy of the poor in rural area
financial terminologies (interest rates, bonds, ) and the mode of operation of
financial institutions (banks, credit institutions, ) Thus, financial knowledge
will be a prerequisite to forming the financial behavior and attitude of the
subject
surrounding financial situation, such as the government's assessment of the
changing situation of the economy The determination of the subject's attitude to
the financial and economic situation is a consequence of that person's financial
knowledge, creating a premise for the financial behavior of that subject
the surrounding economy Through the subject's responses to the economy, we
can identify the subject's sensitivity to the economy when there is a change
2.2.3 Methods of measuring financial literacy
FILS method
This method uses CFA (hypothesis testing method to test the assumption and
hypothesis of the model structure by quality factors, thus showing the quality of
the model adjustment of the expression variables according to the allocation of
specific latent variables)
FSA method
FSA is a measurement of FL based on 5 key issues: (1) Financial monitoring;
(2) Ensure spending; (3) Planning ahead; (4) Select the product; (5) Stay up to
date
Questionnaire method
This is the method of using questionnaires to measure FL Based on
questions focusing on financial topics such as interest rates, the term of
investment
2.3 The role of financial literacy
2.3.1 Impact on the objects of the economy
● Impact on the financial behavior of low and middle-income earners
Previous studies have shown that people with poor FL often have inefficient
expenditures and investments that waste capital and affect their income People and areas with high FL often have a broad understanding of financial issues and investment and savings methods
● Impact on worker’s productivity
A high FL level increases the efficiency and productivity of the work It will help employees better understand the benefits that the organization brings and improve their satisfaction Improving FL has a positive impact on people in their personal and professional lives High FL helps reduce social and psychological pressures and increase welfare for households The biggest advantage of improving FL is to reduce employees' financial mistakes and make them more responsible for managing their personal finances, which will contribute to increasing the households’ living standard
2.3.2 Impact on the overall economy
● Protect consumers from financial shortages that cause scams
By increasing FL through skills, attitudes, behaviors and finances, it will contribute to enhancing the ability to protect consumer finance - especially those who are difficult to access to formal financial services (often are the poor in rural areas)
● Change the habit of keeping idle funds
A population with better financial knowledge can use idle money as a domestic investment to reduce its dependence on foreign capital and promote economic growth The microfinance research also showed that when the poor or residents in rural areas are trained in using financial products, they will be able
to use their idle money better through the expansion of the saving ratio, thereby aiming to use the loan and towards poverty reduction
2.3.3 Impact of financial Literacy on income of the poor in rural area
Knowledge is a fundamental part of human capital, so the impact of knowledge on income is clear, especially in the field of human capital research Studies agree that the number of years of schooling and work experience positively affect their income Therefore, financial knowledge, an aspect of FL, has a positive effect on the income of the subjects in the economy
Regarding the recent research branch on poverty reduction, especially on
Trang 5sustainable livelihoods and microfinance, the attitude of individuals is believed
to influence income For individuals who are cautious and knowledgeable
enough information will spend less when income is high, the trend of savings
increases and will use those savings when income decreases
c Behaviors
In the human capital research branch, people who have misguided investment
behaviors as well as no financial behaviors would adversely affect income
These behaviors and financial decisions directly affect income
2.4 Factors affecting Financial Literacy
2.4.1 Education
Results of previous studies have shown that education is a positive influence
on an individual's FL The higher the education, the higher the rate of correctly
answering financial questions
2.4.2 Income
Income is one of the factors affecting an individual's FL score People with
higher incomes often tend to have higher FL scores and vice versa However,
the above studies also point out the fact that the FL scores and the proportion of
people with accurate financial knowledge are still low, even in the highest
income group This implies a need to enhance and improve FL not only among
low-income people but also among middle and high-income groups
2.4.3 Employment
The group of employed people, especially in terms of economics and finance,
often has more accurate and satisfactory financial knowledge, which leads to
higher FL scores than those without a job
2.4.4 Age
Age is one of the factors affecting FL that is mentioned frequently in many
research in the world Although it is not completely agreed, many studies concur
with the view that: FL score will be highest in middle age and lower in younger
or older ages
2.4.5 Gender
Some viewpoints show that there is a difference in FL scores between
women and men Specifically, women often have lower FL score than men in
the majority of cases Moreover, women provide unspecified answers to
financial problems However, others point out the opposite when it comes to
judging that the effect of gender on the FL score is unclear The study gave an average score of 47.87 for women, 49.02 for men Thus, the influence of gender
on FL is still one factor that has not reached a consensus among the researches
on FL in the world
2.4.6 Race and religion
Previous studies have shown that race and religion are the factors that affect the FL However, the differences in measurement methods and measurement sample division make the results of these studies not consistent and clear
Trang 6CHAPTER 3: RESEARCH METHODS AND RESULTS
3.1 Research Methods and Research Process
This research combines both methods of qualitative research and quantitative
research Based on the synthesis and development of theories from previous
studies as well as FL theory, the author has qualitatively analyzed the factors
that affect FL and the influence of FL on the income of people in the rural
regions
The study combines quantitative methods and modelling survey data about
individuals to obtain information on FL and income of the study subjects The
set of quantitative FL measurement indicators will be built based on the
questionnaire of OECD (2015), then adjusted to tailor Vietnam
The author intensively interviewed experts in the field of financial literacy
and personal finance to adjust the questionnaire to suit Vietnam This method
would clarify further the qualitative relationships between the variables in the
study and explain better the quantitative results achieved in this research
3.2 Research model and hypothesis
3.2.1 Financial Literacy measurement
Financial literacy is a combination of financial knowledge, attitudes and
behaviors that can make financial decisions and help an individual build a
well-being financial
Financial knowledge is understood as the necessary knowledge of theory and
practice for an individual to make financial decisions effectively
H1: FL is reflected in financial knowledge (reflective model)
Financial attitude is an individual's thoughts or beliefs about the financial
field and financial issues, which in turn influence his or her behaviors and
decision making Financial attitude scores were also measured on Likert's scale,
based on the positive financial attitudes of the participants in this study
H2: FL is expressed through financial attitude (reflective model)
Financial behavior is the subject's response to the volatility of the
surrounding economy Through the subject's responses to the economy, the
subject's sensitivity to the economy can be identified when there is a change
H3: FL is expressed through financial behavior (reflective model)
2.6.2 Factors affecting Financial Literacy
● Income
Income is one of the factors influencing FL, which is mentioned in numerous researches - including in the human capital research branch, endogenous growth models and the theory of sustainable livelihoods Income has a positive influence on FL
H4: Income has a positive effect on FL
● Education
The scale includes 5 levels of education: Incomplete high school, high school graduation, college, university, postgraduate Previous studies have suggested that education has a positive impact on FL
H5: Education has a positive effect on FL
• Employment
People who have jobs will have higher FL scores than those who are unemployed Additionally, people who work in finance and state management tend to have higher scores than others
H6: Jobs have an impact on FL
• Age
The opinion on the impact of age on FL is still inconsistent among researches Within the scope of the study, the author proposes the hypothesis
H7: Age has an impact on FL
• Gender
Therefore, gender is a factor affecting FL, which has been discovered in a number of previous studies Within the scope of the study, the author proposes the hypothesis
H8: Gender has an impact on FL
• Race and Religion
The race is one of the influencing factors on FL, but it is inconsistent Within the scope of the study, the author proposes
H9: Race and religion have an impact on FL
3.2.3 Impact of Financial Literacy on income
Studies on human capital and endogenous growth models mentioned that education, in general, has an impact on income
H10: FL has an impact on income
Trang 73.3 Preliminary research
3.3.1 Preliminary qualitative research
Qualitative research is determined by the in-depth interview with experts
who have experience in the field of FL, personal finance, microfinance and
general fields of the Banking-Finance sector
Preliminary qualitative research results
Demographic factors include gender, age, education, employment, income
The questionnaire is required to mention the following issues:
divided into the following 9 areas to ensure the comprehensiveness of the
professions: (1) Field of Administrative Management (2) Industry (3)
Agriculture (4) Technical (5) Scientific and Technological Research (6)
Education (7) Health Sector (8) Banking and Finance (9) Others
Primary/Secondary school (3) High school (4) Intermediate professional
education and Vocational training (5) Colleges and Universities (6)
Postgraduate
become a 5-level Likert scale, then retain the idea of the question
Knowledge, Financial Attitude, Financial Behavior), FL will be calculated by
averaging the scores of the observed variables having statistical significance in
the model
3.3.2 Experimental quantitative research
a Questionnaire
Based on the overview research, research objectives, research model and
preliminary in-depth interview results, the author drafted a questionnaire The
questionnaire designed based on international studies was translated into
Vietnamese, then adjusted to suit Vietnam
- Questionnaire survey consists of 2 main parts:
Part 1: General information includes personal information such as gender,
age, education, employment, years of experience, income and access to modern
electronic payment applications
Part 2: Measurement of financial knowledge through a 5-level Likert scale with 7 variables Information collected from this quantitative study will be analyzed on SPSS 22 and AMOS 20 software
- Survey subjects:
Subjects selected to participate in the study are aged 18 and above, are poor households, and meet the time conditions: (1) the total time of living in Thai Binh province must be at least ½ of the age number and (2) every year, the living time in the province must be at least 6 months (unnecessary continuous)
From the rotation matrix from Exploratory Factor Analysis (EFA), the results show that the variables K6, K2, K7 and A3 are classified into the same factor and combined into factor 3 However, according to the authors of previous studies, these variables have different content Therefore, in order to obtain a full scale, the author will conduct a second in-depth interview with experts to clarify this issue
At the same time, after the process of experimental quantitative research, the survey subjects gave feedbacks on the wording of the questionnaire
3.4 Official research
3.4.1 Official qualitative research
a In-depth interview goal
The scale and model were tested again through the results of preliminary research, combined with the opinions of microfinance and financial experts Hence, it is to redefine the appropriateness of the variables, including definitions, hypotheses and impact trends of variables on latent variables in rural areas of Vietnam
In-depth interviewees: In-depth interviews were conducted with 11 experts in the field of finance and education
needs to include the measurement of the financial literacy of the poor in rural areas of Vietnam, so they must still cover the same questions as those of the OECD (2013) as a theoretical basis for research Therefore, the survey still
Trang 8needs some old questions, but when the model is tested, it is possible to remove
this group (for variables that need to be removed from the model when
experimental research is made)
K1, K3 and K5 (inflation, deposit interest rate and interest rate in case of
inflation), there will have an impact relationship by these three factors, which
often come together and are among the money-saving factors of the rural poor
The group of factors K6, K2, K7 and A3 relate to the people's plans and ability
to use money, so they are still acceptable The explanation is similar to A2 and
A5; A1 and A4
The K4 factor (simple interest rate calculation) is excluded from the model
because recently, most loans in the market are either based on compound
interest or daily interest This is an appropriate issue for Vietnam
3.4.2 Official quantitative research
Official research model
• Method of survey
The method of survey used by the author is to distribute the questionnaire
directly to each survey object After distributing 600 questionnaires, the author
received 512 observations matching the study
CHAPTER 4: RESULTS OF THE RESEARCH MODEL 4.1 Current situation of financial literacy in rural areas of Vietnam
The number of significant observations remaining is 512 observations Among these observations, women account for a much higher proportion than men, since at present, the issue of rural migration to urban areas makes women live in rural areas more than men Therefore, the author's collection of 61.5% of the total votes is female in accordance with reality and previous studies About the region, the North accounts for 52%; the South accounts for 38%, the rest is Central Regarding the age group of 26-40 years, accounting for 42% is the largest proportion, followed by the age group from 41-55 years old, accounting for 35.2% In terms of education, most of which are college and university account for 49.2%, then high school with 20.1% The main subjects of the survey are the poor living in rural areas, and most of them are working in the field of agriculture and industry, the income is mainly from 3-5 million a month (accounting for 30.7%), and 1- 3 million a month (accounting for 23.4%), the rest is subject to income from 1 million or less However, most of the interviewed groups are the main labor in the family, the number of dependents is from 1 to 3 people, so they are still the poor households
4.1.1 Current situation of financial literacy according to the reflection factors
The majority of the observed variables of Financial attitude and Financial Behavior have values in the range [3.41; 4.2], which is quite large, showing that most people agree with the opinions from the scale However, many surveyed people have a neutral opinion about financial attitude, "I have to spend most of the money I have on buying goods and food for the family." (average of 3.24) showing the buying goods attitude of residents
About the Financial knowledge observed variable, all observed variables are also valid in the range [3.65; 4.1] However, the difference between the average score among the answers is quite large, this can reflect respondents' uncertainties about financial literacy questions Especially in the question about knowledge of K1 inflation definition, there were 102/152 respondents answered: "I am not sure" The access to financial knowledge such as inflation, interest rates,… is quite limited
Trang 94.1.2 Current situation of factors affecting financial literacy
The FL score for women is 0.0506 points higher than for men This shows
that there is no obvious difference between men and women when measuring
FL The group with the highest average FL score was between 56-70 years old
and 41-55 years old, with 4,069 and 3,871 points, respectively The group aged
18-25 years has the lowest FL score with 2,754 points
4.2 Assess the reliability of the scale of reflection factors
The "Financial Knowledge" scale has a Cronbach's Alpha coefficient of
0.729, and the correlation coefficients are all greater than 0.3 The "Financial
Knowledge" scale is satisfactory for the follow-up analysis
The "Financial attitude" scale has a Cronbach's Alpha coefficient of 0.834,
and the correlation coefficients are all greater than 0.3 The scale of "Financial
attitude" is satisfactory to carry out the next analysis
The "Financial Behavior" scale has a Cronbach's Alpha coefficient of 0.871,
and the correlation coefficients are all greater than 0.3 The "Financial Behavior"
scale is satisfactory to perform further analyzes
4.2.1 Exploratory Factor Analysis (EFA)
The EFA result of Financial Behavior shows that 9 measurement criteria
from B1 to B9 are loaded into one factor with load factors from 0.592 to 0.766
respectively, proving that the original statements are significantly related to the
factor
The EFA result of Financial Attitude shows that 5 measurement criteria from
A1 to A5 are loaded into a factor with load factors from 0.658 to 0.838,
respectively, proving the statements are significantly related to the factor
The EFA result of Financial Knowledge shows that 6 measurement criteria
from K1 to K6 are loaded into two separate factors:
Factor 1 (Interest rate and inflation factor): including K2, K3, K1, and K5
with load factors from 0.625 to 0.844, respectively, proves that the original
statements are significantly related to the factors
Factor 2 (Factor of risk and opportunity cost): including K7, K6 with load
factors of 0.883 and 0.855, respectively, proves that the original statements are
significantly related to the factors
4.2.2 Confirmatory Factor Analysis (CFA)
• CFA model Level 1 measures the reflection factor of FL
After CFA analysis, FL scale includes 4 elements (Behavior, Attitude, Knowledge_1, Knowledge_2) CFA analysis results show that the components
of the scale all meet the requirements of value and reliability
• CFA model Level 2 measures FL
The results of CFA analysis of the criteria to measure the suitability of the model show that Chi-square / df = <3, TLI =, CFI =, NFI = are all greater than 0.9, the coefficient of RMSEA = <0.08, so the model has relevance to the market P-value results of the observed variables representing the factors are all equal to 0.000 The overall reliability coefficient of the scale reaches a value higher than 0.5, and the extracted variance coefficient is within an acceptable range It can be affirmed that the scale achieves convergence and unidirectional values Thus, the research scale for FL has ensured analysis requirements
4.3 Assess the impact of influencing factors
a Estimate OLS regression model
Summary of the official quantitative model
Sample R R square Adjusted R
Square
Standard error
of estimation
Durbin-Watson
Forecasting set: (constant), education, gender, age, income
Dependent variable: Financial Literacy
(Source: Calculation results from SPSS 22 and AMOS 20)
From Model Summary b table, the following results were collected:
- Adjusted R Square value reaches 32% This means that variables including education, gender, age, and income affect 32% the variation of the dependent variable FL, while 68% remaining are due to other variables outside the model and random errors
- The Durbin - Watson value of the model reaches 1.705, which is in the range of 1 to 3, so it is synonymous with a good single linear regression model
Trang 10Table 4.12 ANOVA official quantitative test
Linear regression function 60.980 000b
a Dependent variable: Financial Literacy
b Forecasting set: Constant, Education, Gender, Age, Income
(Source: Calculation results from SPSS 22 and AMOS 20)
Official quantitative coefficients
Sample
Unstandardized
coefficients Beta
standardized coefficient
Value Sig value VIF value Beta Standard
deviation
Gender 0.019 0.036 0.020 0.537 0.591 1.007
Age 0.021 0.001 0.515 13.874 0.000 1.036
Income 0.038 0.012 0.118 3.138 0.001 1.065
Education 0.036 0.013 0.099 2.647 0.008 1.055
(Source: Calculation results from SPSS 22 and AMOS 20)
a Structural Equation Modeling (SEM)
Figure 4.4.Structural Equation Modeling SEM
(Source: Calculation results from SPSS 22 and AMOS 20)
The standardized regression coefficients of the independent variables show
that the effect of Age on the FL is 1.182, the largest of all factors The influence
of education and age are 0.321 and 0.133, respectively The criteria measuring the suitability of the model show that Chi-square/df = 2,861 <3, GFI = 0.904, CFI = 0.906, which are all greater than 0.9, TLI is within an acceptable threshold, the coefficient RMSEA = 0.060 <0.08, so the model achieves market data suitability The results of the P-value of the independent variables are all lower than the value of 0.05 Therefore, all the independent variables show the influence on the dependent variable, FL
b Test the reliability of the model with Bootstrap method
Model estimation results through Bootstrap with n = 1000
SE-Bias
Critical Ratios
Financial_Literacy
Financial_Literacy
< - Income .082 .002 .291 .002 .003 0.67 Financial literacy
< - Education .066 .001 .131 .003 .002 1.5
(Source: Calculation results from SPSS 22 and AMOS 20)
This test helps to re-evaluate the reliability of the estimates in the model with the repeating sample N = 1000 Through the table above, the CR coefficients are less than 1.96 Therefore, it can be concluded from the results of the model estimate, the difference of the coefficients in the model with 1,000 observations
is very small In conclude, the FL model is still significant for large sample sizes
4.4 Assess the impact of financial literacy on income
4.4.1 Assess the impact of financial literacy on income
Summary of the impact model of FL on income
Sample R R square Adjusted R Square Standard error of
estimation
Forecasting set: Constant, Financial Literacy Dependent variable: Income
(Source: Calculation results from SPSS 22 and AMOS 20)