Wealth and credit compliance

does economic literacy matter?

Abstract

The purpose of this work is to empirically examine the influence of economic literacy upon individuals’ over-indebtedness and households’ wealth. It may be argued that the lack of economic- financial knowledge may have detrimental consequences, in particular reflected in higher exposure to credit and financial risk. There is scarce literature testing the importance of economic-financial literacy for individuals’ over-indebtedness and household wealth. This article provides empirical evidence on the importance of financial literacy, for both individuals’ over-indebtedness and household wealth, exploring the case of Portugal, a country about which there is scant empirical evidence on these matters.