Towards a measure of perceived financial capability part 2

I’ve developed a new way to visualize the results from one of our analyses from the perceived financial capability paper. In the previous post, I plotted the standardized score on the y axis and age groups across the x axis. Then perceived financial capability (a.k.a. subjective knowledge) and objective knowledge are plotted as separate lines. As an alternative we position the scores on x and y axes and plot the age groups as factors in the graph. The resulting display implies a correlation indicated with a 45-degree line. The deviation from the straight line – above or below – indicates the extent of over estimation and under estimation of financial knowledge by age group. By showing distance from the straight line we see clearly that individuals over 60 yrs of age overestimate their financial knowledge. I think the plot roughly meets the criteria established by Tufte (2001). I am curious what others think about the pros and cons of these two graphical displays.

Visualization excellence

  • Consists of complex ideas communicated with clarity, precision, and efficiency;
  • Is that which gives to the viewer the greatest number of ideas in the shortest time with the least ink in the smallest space;
  • Is nearly always multivariate;
  • Requires telling the truth about the data.

finknowledge_fincapability

Tufte, E. (2001). The visual display of quantitative information (2nd ed.). Cheshire, CT: Graphics press.

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