Advertisement

Financial education and insurance advice seeking

  • Jing Jian XiaoEmail author
  • Nilton Porto
OriginalPaper

Abstract

The purpose of this study is to examine the potential effects of consumer financial education on insurance advice seeking with a large and representative national data set in the U.S. Previous research has examined factors associated with insurance advice seeking. After controlling for these factors, financial education, which has not been examined in previous research, is positively associated with this behaviour. Specifically, high school and workplace financial education show positive associations with insurance advice seeking. Further analyses show that there are differences in insurance advice seeking between consumers with and without life insurance.

Keywords

Advice Consumer behaviour Consumer education Financial capability Financial literacy Insurance 

References

  1. Blinder, Alan S. 1973. Wage Discrimination: Reduced Form and Structural Estimates. Journal of Human Resources 8 (4): 436–455.CrossRefGoogle Scholar
  2. Calcagno, Riccardo, and Chiara Monticone. 2015. Financial Literacy and the Demand for Financial Advice. Journal of Banking & Finance 50: 363–380.CrossRefGoogle Scholar
  3. Collins, J. Michael. 2012. Financial Advice: A Substitute for Financial Literacy? Financial Services Review 21 (4): 307–322.Google Scholar
  4. Cude, Brenda J. 2005. Insurance Disclosures: An Effective Mechanism to Increase Consumers’ Insurance Market Power? Journal of Insurance Regulation 24 (2): 57–80.Google Scholar
  5. Cummings, Benjamin F., and Russel N. James. 2014. Factors Associated with Getting and Dropping Financial Advisors Among Older Adults: Evidence from Longitudinal Data. Journal of Financial Counseling and Planning 25 (2): 3–19.Google Scholar
  6. Diacon, Stephen, and Christine Ennew. 2001. Consumer Perceptions of Financial Risk. The Geneva Papers on Risk and Insurance—Issues and Practice 26 (3): 389–409.CrossRefGoogle Scholar
  7. Fernandes, Daniel, John G. Lynch Jr., and Richard G. Netemeyer. 2014. Financial Literacy, Financial Education, and Downstream Financial Behaviors. Management Science 60 (8): 1861–1883.CrossRefGoogle Scholar
  8. Finke, Michael S., Sandra J. Huston, and Danielle D. Winchester. 2011. Financial Advice: Who Pays. Journal of Financial Counseling and Planning 22 (1): 18–26.Google Scholar
  9. Finra, I.E.F. 2013. Financial Capability in the United States: Report of Findings from the 2012 National Financial Capability Study. Washington, DC: FINRA Investor Education Foundation.Google Scholar
  10. Grable, John E., and Swarn Chatterjee. 2014. Reducing Wealth Volatility: The Value of Financial Advice as Measured by Zeta. Journal of Financial Planning 27 (8): 45–51.Google Scholar
  11. Hanna, Sherman D. 2011. The Demand for Financial Planning Services. Journal of Personal Finance 10 (1): 36–62.Google Scholar
  12. Huston, Sandra J. 2010. Measuring Financial Literacy. Journal of Consumer Affairs 44 (2): 296–316.CrossRefGoogle Scholar
  13. Lachance, Marie-Eve, and Ning Tang. 2012. Financial Advice and Trust. Financial Services Review 21 (3): 209–226.Google Scholar
  14. Lusardi, Annamaria, and Olivia S. Mitchell. 2009. How Ordinary Consumers Make Complex Economic Decisions: Financial Literacy and Retirement Readiness. Working Paper No. w15350. Washington DC: National Bureau of Economic Research.Google Scholar
  15. Lusardi, Annamaria, and Olivia S. Mitchell. 2014. The Economic Importance of Financial Literacy: Theory and Evidence. Journal of Economic Literature 52 (1): 5–44.CrossRefGoogle Scholar
  16. Oaxaca, Ronald. 1973. Male-Female Wage Differentials in Urban Labor Markets. International Economic Review 14 (3): 693–709.CrossRefGoogle Scholar
  17. Porto, Nilton, and Jing Jian Xiao. 2016. Financial Literacy Overconfidence and Financial Advice Usage. Journal of Financial Service Professionals 70 (4): 78–88.Google Scholar
  18. Remund, David L. 2010. Financial Literacy Explicated: The Case for a Clearer Definition in an Increasingly Complex Economy. Journal of Consumer Affairs 44 (2): 276–295.CrossRefGoogle Scholar
  19. Robb, Cliff A., Patryk Babiarz, and Ann Woodyard. 2012. The Demand for Financial Professionals’ Advice: The Role of Financial Knowledge, Satisfaction, and Confidence. Financial Services Review 21 (4): 291–305.Google Scholar
  20. Stigler, George J. 1961. The Economics of Information. Journal of Political Economy 69 (3): 213–225.CrossRefGoogle Scholar
  21. Tang, Ning, and Marie-Eve Lachance. 2012. Financial Advice: What About Low-Income Consumers? Journal of Personal Finance 11 (2): 121–158.Google Scholar
  22. Tennyson, Sharon. 2011. Consumers’ Insurance Literacy: Evidence from Survey Data. Financial Services Review 20 (3): 165–179.Google Scholar
  23. Von Gaudecker, Hans-Martin. 2015. How Does Household Portfolio Diversification Vary with Financial Literacy and Financial Advice? The Journal of Finance 70 (2): 489–507.CrossRefGoogle Scholar
  24. Winters, Robert C. 1993. The Consumer Movements and the Impact on Insurance: An American Point of View. The Geneva Papers on Risk and Insurance—Issues and Practice 18 (4): 412–414.CrossRefGoogle Scholar
  25. Xiao, Jing Jian, Cheng Chen, and Fuzhong Chen. 2014. Consumer Financial Capability and Financial Satisfaction. Social Indicators Research 118 (1): 415–432.CrossRefGoogle Scholar
  26. Xiao, Jing Jian, and Barbara O’Neill. 2016. Consumer Financial Education and Financial Capability. International Journal of Consumer Studies 40 (6): 712–721.CrossRefGoogle Scholar
  27. Xiao, Jing Jian, and Nilton Porto. 2016. Which Financial Advice Topics are Positively Associated with Financial Satisfaction? Journal of Financial Planning 29 (7): 52–60.Google Scholar
  28. Xiao, Jing Jian, and Nilton Porto. 2017. Financial Education and Financial Satisfaction: Financial Literacy, Behavior, and Capability as Mediators. International Journal of Bank Marketing 35 (5): 805–817.CrossRefGoogle Scholar

Copyright information

© The Geneva Association 2018

Authors and Affiliations

  1. 1.Department of Human Development and Family StudiesUniversity of Rhode IslandKingstonUSA

Personalised recommendations