Your browser doesn't support javascript.
An empirical analysis on household financial vulnerability in India: exploring the role of financial knowledge, impulsivity and money management skills
Managerial Finance ; ahead-of-print(ahead-of-print):22, 2022.
Article in English | Web of Science | ID: covidwho-1769512
ABSTRACT
Purpose The COVID-19 pandemic has exposed the financial-economic vulnerability of the public and threatened the household financial stability, especially of the low-income group population, in developing economies such as India. The assessment of household financial vulnerability has gained considerable attention these days, especially in poor and developing countries. This article seeks to assess the level of household financial vulnerability in India, based on a household survey conducted across India. Design/methodology/approach This paper has proposed a financial vulnerability index (FVI) based on three self-reported parameters (1) making end meet, (2) perception of income shock and (3) perception of expenditure shock. Subsequently, the impact of various behavioural and socioeconomic factors on the proposed financial vulnerability index has been assessed using fractional probit regression. Findings The research findings indicate that higher financial knowledge, better money management skills and lower impulsivity in financial behaviour can reduce financial vulnerability. It is suggested that suitable financial literacy programmes be implemented for vulnerable sections of society to enhance their financial knowledge, improve money management skills and manage impulsivity, thereby helping them make informed financial decisions leading to their financial well-being. Originality/value To the best of the authors' knowledge, none of the past studies have developed and assessed the financial vulnerability index in India. This study provides relevant recommendations for various financial sector regulators and government institutions in India.
Keywords

Full text: Available Collection: Databases of international organizations Database: Web of Science Language: English Journal: Managerial Finance Year: 2022 Document Type: Article

Similar

MEDLINE

...
LILACS

LIS


Full text: Available Collection: Databases of international organizations Database: Web of Science Language: English Journal: Managerial Finance Year: 2022 Document Type: Article