Katie’s Questions on Financial Practices research

1) Logistic regression and causality (look at page 316 of Hilgert and Hogarth, 2003).

2) Important idea to look at: “hierarchy” of financial practices.  Hilgert and Hogarth discuss a hierarchy that goes from cash flow management, to credit, to savings, to investment.  Buckland et al., in their literature review, discuss Lusardi’s concept of “basic” versus “advanced” literacies – she says that people with low income do not need advanced literacy.  How does this inform policy/interventions for low income people? (This is more of a rhetorical question – an idea that we can return to later on).

3) Look at concept of statistical significance.



Questions from Readings: Buckland & Simpson, Lalime & Michaud

Independent Study Project, Financial behaviour among Canadians.

Background readings.

Simpson & Buckland: Examining evidence of financial and credit exclusion in Canada from 1999 to 2005

Am struggling to understand the method they developed: what, for example, is probit regression?  The model used seems to have been developed by Jappelli (is also used in the Lalime & Michaud article) and used the life cycle as model of consumption.  See article for formula used.

Lalime & Michaud: Litteratie financiere et preparation a la retraite au Quebec et dans le reste du Canada.  Financial literacy and preparing for retirement, a comparison between QC and the ROC.

Methods (Questions): also using the life cycle model of consumption and Jappelli’s model.  Shows how financial literacy and savings habits depend on the same fundamental elements…which are?

The model is developed to show financial literacy and savings are dependant on revenue.  How?  I have no idea.  See page 7 for the formula.

Page 8: Indicates that investment in retirement increases with revenue, but goes down with increased financial literacy.  This seem counterintuitive to me.

Refers to two periods of revenue/savings that are unclear to me.

*Didn’t quite understand if the variables measured to try to explain the difference in QC were then the reason, in the end, or if they were ‘measured out’.   Other variables measured:

-Socio economic status

-Fewer people finishing post secondary

-Lower levels of family income

-Highest level of immigrants in Canada (different education systems?)

*In the conclusion, I still want to ask why…

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