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Article
Publication date: 29 July 2020

Piotr Bialowolski, Andrzej Cwynar and Dorota Weziak-Bialowolska

The article aims to study the relationship between the assignments of financial management responsibilities and the level of financial literacy within married and cohabitating…

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Abstract

Purpose

The article aims to study the relationship between the assignments of financial management responsibilities and the level of financial literacy within married and cohabitating couples.

Design/methodology/approach

The link between household financial management and the financial literacy of union partners was examined using dyadic survey data. In the dyadic multilevel regression analysis, the financial management process was scrutinized, and two distinct measures of financial literacy (tested and self-assessed) were used as the outcomes in the analysis.

Findings

The extent to which married and cohabitating individuals engage in household financial management was found to positively correlate with their financial literacy. Self-reports about the division of financial management responsibilities were found to be biased with individuals typically overestimating their share in household financial management. Consequently, the status of household financial manager was not as crucial for financial literacy as was the self-perception of engagement in household financial management. Despite the benefits of intrahousehold labor specialization, delegation of sole responsibility for household financial matters may place the person who waives the responsibility at a serious risk of self-exclusion from lifelong financial learning.

Originality/value

The article uses dyadic data (from married and cohabiting couples), which ensures more rigorous and accurate evidence for the link between the household financial management and financial literacy. A novel approach to the analytical treatment of partners' contradictory reports on the role of couple's financial manager is also proposed. The breadth of household financial management is captured by analyzing three stages of the process: proposing, decision-making and implementation of financial solutions or actions.

Details

International Journal of Bank Marketing, vol. 38 no. 6
Type: Research Article
ISSN: 0265-2323

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Article
Publication date: 8 September 2022

Piotr Bialowolski, Andrzej Cwynar and Dorota Weziak-Bialowolska

Preserving sufficient financial assets is crucial for maintaining the standard of living. The lack of adequate financial cushion can translate into financial hardship at any age…

1681

Abstract

Purpose

Preserving sufficient financial assets is crucial for maintaining the standard of living. The lack of adequate financial cushion can translate into financial hardship at any age, but its effects can be especially severe in later adulthood. The authors evaluate whether financial literacy can prevent individuals from depleting the stock of liquid financial assets below a predefined minimum level.

Design/methodology/approach

Defining financial resilience as the ability to maintain the value of household savings above the level of 3-monthly incomes, the authors examined whether financial literacy is (1) prospectively associated with the probability of losing financial resilience and (2) the probability of gaining financial resilience among financially vulnerable middle-aged and older adults. To this end, the authors applied the multivariate Cox proportional hazards model with time-varying covariates. Data were retrieved from the Survey of Health, Aging and Retirement in Europe with the sample comprising 13,718 adults aged ≥ 50 years in (1) and 12,802 in (2).

Findings

The authors show that financial literacy plays a protective role for financial resilience. Its role is not symmetrical and protects more against the loss of financial resilience than it contributes to the gain of financial resilience. Among individuals aged 65–74, the association between financial literacy and financial resilience is weaker than among adults in the middle-age (50–64) and among the oldest (75+).

Social implications

Fostering financial literacy can be important to help middle-aged and older adults maintain a good quality of life and favorable living standards.

Originality/value

Given the scarce evidence on the links between financial literacy and financial resilience among middle-aged and older adults, the article contributes to the literature by examining whether financial literacy retains its protective role in later stages of the life course.

Details

International Journal of Bank Marketing, vol. 40 no. 7
Type: Research Article
ISSN: 0265-2323

Keywords

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Article
Publication date: 16 March 2015

Kamil Makiel

The purpose of the paper is to analyze the impact of quantitative easing (QE) performed in the USA on relationship between assets mainly from mining and oil industries. Based on…

861

Abstract

Purpose

The purpose of the paper is to analyze the impact of quantitative easing (QE) performed in the USA on relationship between assets mainly from mining and oil industries. Based on the empirical results, the method of diversified portfolio creation has been proposed.

Design/methodology/approach

Nine DCC-GARCH-type models have been estimated for each group centered around a main asset: a company from the oil or mining industry, the appropriate currency pair for its market of origin, commodities which could be used for the diversification of risk involved in investing in a portfolio containing the company, and the largest company from the same industry listed on the US market. Each series of conditional correlations was analyzed with regard to the changes that occurred during the various stages of QE.

Findings

The correlations are shown to be stabilizing in the successive stages of QE. The most significant changes in the distribution of correlations can be observed after the first stage of QE. The effects of QE are evident not only in the USA but also in other countries; however, the level of its influence varies between different markets and assets. It is possible to diversify the inflation, currency and market portfolio risk by appropriately chosen asset decomposition.

Research limitations/implications

The DCC model is limited, so to provide more precise results, more sophisticated models can be estimated and compared.

Practical implications

The paper investigate the fact of stabilization in financial markets relations. The findings may prove the validity of continuation of QE. A portfolio creation method has been proposed – it has been stated that including commodity in portfolio is more appropriate then only-bond–equity mix.

Originality/value

The new approach of analyzing financial stability has been proposed – the control for stability of conditional correlation.

Details

The Journal of Risk Finance, vol. 16 no. 2
Type: Research Article
ISSN: 1526-5943

Keywords

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