1.

Economic Literacy

This chapter examines the economic literacy concept, its development, affecting factors,
definitions, and models via the framework of a literature review. It focuses and discusses
performance and innovation, and also some idea generation, and concludes with a summary of
the basic goals of economic literacy.

Households come in contact with financial markets as much as in the past few years, and they
also have been linked to increased economic risk as a result of financial market deregulation and
policy reforms intended to encourage pension savings through personal retirement funds and
personal retirement accounts. However to various extents, such trends are influencing all nations
and all aspects of economic operations, varying from payment demands (as seen by the rise of a
credit card business) to portfolio investments and financing in the property and personal credit
markets (Achtziger, 2015). Nonetheless, much of these acts are undertaken by ignorant persons.
The current financial crisis has heightened the risk that individuals experience when people lack
the financial competence needed to handle economic crises. Other factors being equal, variations
in economic literacy provide the potential for major distributional effects of an economic crisis,
because inexperienced investors are more vulnerable to financial price swings than educated
investors who can handle and diversify risks. The risks are particularly severe for people whose
pensions are depending on stock market movements, as well as for the aged, whose investments
are dependent on decisions taken recently and have limited opportunities for adjustment. Current
financial economic researches have made major advances in evaluating economic literacy.
Economic experts have usually measured literacy using a basic self-assessment of participants'
economic knowledge; nevertheless, there is a new generation of research based on the more
precise and trustworthy economic questions. Such surveys have conclusively demonstrated that
even a substantial majority of the overall population understands almost nothing about financial
services and many people are confused even with the most fundamental economic theories, along
with financial derivatives, interest rates, interest mitigating, and mortgages and other treasury
bonds (Aw, 2018). There's also some strong evidence that economic literacy varies greatly
among families and is particularly restricted among the less educated, poorer population
characteristics. What's more concerning about this proof is that many individuals aren't even
conscious of their ignorance. Despite significant advances in assessing economic literacy, its
drivers, the efficiency of financial education, and the implications of economic literacy for
individual financial choices remain unknown.

As being an educated person, a full man, with aware of his society in its many aspects of literary,
artistic, scientific, and behavioral knowledge, a man should be familiar with all the main
disciplines of knowledge. In contrast to this fundamental value judgement, there is an economic
case for universal literacy. A modern citizen is relied upon to assess public policy in a thousand
paths of recreational, educational, medical, and economic, for example and he will make good
judgments if he really is well-informed (Alexander, 2017). The problem in this basic argument
for universal literacy is revealed by its summary that, Why wouldn't the citizen acquire all human
knowledge? He will undoubtedly be well-educated and well-equipped to carry out his civic
responsibilities. Never before has it been simpler to obtain an answer: No one is capable of
understanding all knowledge limited man's acquiring skills and restricted life expectancy are
sufficient to prohibit him from being a financial expert, a physician, a concert pianist, a sports
champion, or a federal judge. Consequently, he really can't approach the limits of his intellectual
capacity since he will spend a large portion of his adult life to making some money, raising a
family, and savoring a limited educational life (Aw, 2018).

Men must acquire certain common skills, such as linguistics, arithmetic, and logic, in order to
interact with one another and sort through the carvings left by deceased and remote men.
Additionally, they must understand a narrow variables with respect somewhat effectively in
order to make a living. These are the economic and social requirements. It is beneficial to have
more information; for example, learning of a second language allows for a broader spectrum of
interaction that might be beneficial to both a professor and a door-to-door salesman (Bianco,
2011). Thus, man can't afford to acquire all learning, or all natural sciences, or all economics, or
even all branches of economics. So, He must acquire a fundamental knowledge of physics
that must be enough to avoid being struck by falling objects but need not provide the slightest
clue of the basis of genetics, Russian language, or engineering. He could be a loser if he wastes
his time reading baseless things rather than excellent literature, or attending baseball games
rather than chamber music concerts, but he will manage. Every day of his career, a man will
require numerous types of specialized knowledge that how to treat an untreated cut, how to
purchase a home, how to launch a stuck vehicle and how to fly an aircraft (Brown, 2016). These
requirements will finally be filled via the acquisition of complex pieces of information, but with
the help of hiring the professionals who hold this knowledge and skills that is sufficient. The
painful thumb may be healed by a novel, by using sophisticated antibiotic, but the person need
not understand its identity, and the physician prescribing it need not have the slightest
understanding how the antibiotic is made. As far as each piece of specialized information is
recognized to someone, it is eventually available to the high school graduate, but he is least
likely to gain it when required than that of the college graduate (Donnelly, 2016). Let us begin
by asking why individuals should be economically conservative rather than musically,
politically, or biologically educated. If we are to award economics a particular status and require
that the majority of people gain at least a basic understanding of the subject, it must fit into one
of two categories of learning (Fernandes, 2014).

 As a mode of communication between individuals, integrating a fundamental language or

concept that is met often enough that it should be held by everyone.
 As a form of knowledge that is regularly required but is not readily available from
professionals (Duryasula, 2010).

If economics does not match one of these requirements, that does not have any particular
standing in comparison to the other a hundred disciplines. While it may still be a very valuable
and even desirable subject of knowledge, this does not justify for demanding that every high
school senior study it (Harnish, 2018).

1.1. Why Economic Literacy is Important?

Economic literacy is becoming more critical as households make choices on how to invest their
money how much to borrow in the financial markets. Additionally, literacy also has much
implications for the general performance of the economy.

 The Asset Side

Economic literacy is essential on the asset side, since financial products have grown highly
complicated. Even for basic products like as bank deposits and government securities, there are
sometimes several alternatives and distinct contracts, complicating the selection process.
Additionally, as a result of financial economic growth and reform, the range of investment
products accessible has expanded significantly since the late 1980s, with numerous new ideas for
investing in stocks and bonds. Households in several countries are increasingly associated with
financial risks as a result of increased stock market involvement and financial criteria aimed at
encouraging retirement pension systems via retirement savings and personal pension funds.
Numerous empirical research have shown that an absence of economic literacy is connected with
insufficient financial derivatives, inappropriate portfolio selection, and low investment returns
(Islam, 2017). Harnish, (2018) examine statistical ability and some other measurements of
cognitive function in a representative sample of young adults in Great Britain i.e. the English
Longitudinal research of Ageing and discover a strong correlation between numeracy stages and
measures of retirement savings and investment assets, pension knowledge, and interpreted
financial security. Kasser, (2018) examine the degree ,that the disparities in numeracy and wider
cognitive function predict future pathways for important economic consequences such as asset,
retirement income, and important characteristics of retirement hopes in future jobs. Khare,
(2015) examine the relationship for both cognitive abilities and stock ownership by using data
from the Survey of Health, Investments, Retirement, and Expectations (SHARE). They discover
that the tendency to invest directly or indirectly in stocks via index funds and retirement accounts
is strongly connected to mathematical skills, verbal memory, and recall abilities. Klontz, (2011)
demonstrate in a separate article that numeracy, as judged by the correctness of replies to three
basic mathematics questions, is a significant predictor of overall wealth, financial wealth, and the
percentage of risks and rewards of ownership in stocks. Kuknor, (2017) add to the body of
research on the association between home wealth and both spouses' intellectual capability.
Limbu, (2017) examine the relationship between financial expertise and wealth using
economic literacy measures from a specialized component of the Dutch DNB Household Survey.
The module includes fundamental concerns about the ability to complete basic calculations and
anticipate interest payments, interest rates, and the money assumption, as well as the more
innovative questions about the stock market's operation, the qualities of stocks, savings accounts,
and bonds, equity premium costs, and the advantages of diversification. They discover that
financial intelligence is connected with more wealth, a greater likelihood of investing in the
stock market, and a greater propensity for retirement savings. Lynch, (2018) establish a link
between financial knowledge and Italian individuals' portfolio diversification. They rely on the
2007 Uncredited Customer Survey (UCS), which includes extensive indications of each
investor's portfolio selection, financial knowledge, and demographic factors. Economic literacy
is substantially connected with portfolio diversity, when other socioeconomic traits and market
risk variables are controlled for. The researcher compares objective levels of economic literacy
obtained through actual economic questions to financial institutions' self-assessment of economic
knowledge and discover only a weak correlation between the two, which explains why 60% of
those with low economic literacy express above average trust in economic matters, while 16% of
shareholders who score well on economic literacy. Mathai, (2016) examine the relationship
between economic literacy and involvement in formal financial markets in underdeveloped
countries. They demonstrate via survey data from India and Indonesia that economic literacy is a
great indicator of request for financial services. Furthermore, in a field experiment in which
randomly picked underserved families are provided finance instruction, they discovered that the
programs had no influence on the chance of establishing a bank savings account, except for
totally uninformed and economically ignorant family. Paul, (2017) study how economic literacy
affects employees' decision behavior and how decreasing information about dividend payments
can raise metrics of price elasticity responsiveness as among economically illiterate. They
discover that how knowledge is given to employees has a significant influence on the optimum
fees that businesses may charge in the market. Another of the research' weaknesses is that the
motivation towards becoming economically educated is conditional on someone's wealth and
portfolio management, creating an endogeneity bias. Two publications that examine this critical
subject reach contradictory conclusions. Peltier, (2016) analyses a big records panel data set
comprising sufficient knowledge on the education levels of Danish investors, as well as social
and financial characteristics. The authors demonstrate that households' stockholdings rise after
completion of an economic education programs and the addition of an economists to the family.
To separate the dual causation between portfolio selection and the desire to pursue a career in
economics, Qamar, (2016) leverage increased educational opportunities as a vehicle for
economic education. The dynamic panel analysis suggests that economic education and stock
market involvement are causally related. Sari, (2017) also resolve the point of endogeneity,
showing that economic literacy training required by state governments in the United States had
no influence on financial market involvement. They demonstrate that attendance rates for
individuals who completed prior to the program being mandatory and but were not subjected to
economical literacy instruction are similar for those that were introduced to the programs.

 The Debt side

Upon this debt side, virtually all OECD nations have seen a rise in property loans, credit card
holding, and credit risks. To analyses various loan information, select between various credit
facilities, and detect loan losses, a basic degree of economic literacy and the ability to
differentiate between goods that are essential (Singh, 2018). The recent conflict demonstrates
that low economic literacy can have a detrimental effect not just on the investment and
borrowing decisions of individual borrowers and lenders, but also on the severity of an economic
crisis, as debt levels is a significant component of the account balances of banks and other
financial institutions. Skagerlund, (2018) found that household debt is related with higher
financial crisis, as defined by the responsiveness of consumer debts and restructurings to banking
and macroeconomic disturbances, utilizing cross-country information on government borrowing
and dynamic panel on defaults.

Despite its vital importance and potential harm, the debt part of economic literacy has attracted
less research interest than the asset side. Taylor, (2016) examines a representative sample of debt
literacy of America, economic knowledge, and judgments about their amount of borrowing.
They assess debt literacy using a series of questions that assess individuals' understanding of core
debt concepts and discover widespread illiteracy across all segments of the community, but
particularly among women and people. The research establishes a leading authority among debt
literacy and economic knowledge as well as debt load, and then also establishes that persons with
poor debt literacy are more likely to trade in elevated methods, paying fees and utilizing
increased borrowing. This data provides support to the idea that poor forms of economic literacy
have led to debt accumulation that has been followed by a rise in the frequency of consolidations
and defaults in several nations, such as the United States and Germany (Trombetta, 2016).

 The Macro side

Economic literacy also plays a role in the efficient operation of markets and policy. In beginning,
a lack of economic literacy may encourage deceptive financial practices and unjust enrichment in
financial markets, posing a significant barrier to successful financial intermediation. In contrary,
as the Finance Ministers Meeting emphasized, well-informed and skilled financial users result in
improved financial markets where rouge goods are removed from the market and trust is restored
(Trombetta, 2016). So if households are well aware, they can indeed self-control policymakers,
implying that a more informed voting public results in better economic policymaking (Yahaya,
2019), an argument emphasized by Bernanke, who proposes that increasing economic literacy is
necessary to re-establish economic confidence, upon which the Federal Reserve's task of money
market operations and ensuring a secure financial system is predicated. As the Fed achieves
Congress-mandated macroeconomic objectives (wealth creation, maximum employment, and
neutral long-term inflation rates), it is important that the public understands our goals and
activities. Informing the public about the logic behind our actions contributes to the development
of trust in our economic system which is another critical feature in ensuring the smooth operation
of our economy (Zachary, 2018).

1.2. International evidence

Despite the relevant role of economic literacy in family decision-making and the correct
operation of financial markets, the majority of research on the necessity of literacy and the
efficacy of Economical education is concentrated on the United States. Other areas have had
surveys, and they're not similar in terms of topic or methodology. Various studies details surveys
conducted in 11 countries that measure economic literacy across one or even more levels
(Cronqyist, 2015). Such surveys use two distinct methods for assessing literacy. The first is to
assess respondents' understanding and knowledge of economic concepts, as well as their
opportunity to utilize financial principles to specific circumstances, as is typical in the United
States, Italy, Germany, and the Netherlands. The alternative is to have individuals self-assess
their economic literacy and capacity to manage economic transactions, similar metrics are
available for the United Kingdom, Japan, Australia, and a few other nations. From outside this
concept, two most recent investigations in India and Indonesia generate measures of economic
literacy (Gathergood, 2019). While these investigations range of the people they engage, the
technique used to assess economic literacy, and the methodology used, they nonetheless reveal
some consistent conclusions. To begin, many societies have a poor degree of economic
literacy, second, economic literacy is positively connected with educational attainment as
assessed by school or college enrollment. Additionally, individuals often claim learning about
more financial concerns than is really the case when comparisons are feasible. Finally, studies
indicate that economic literacy is often related with increased earnings and wealth. This must not
be regarded as a causal relationship between economic literacy and wealth, since the motivations
to know about economics are strongly correlated to one's economic state. Furthermore, as
discussed above, determining the causal relationship between economic literacy and investment
results is a significant undertaking. To allow cross-country comparisons, a unique questionnaire
must be provided to a representative sample of every global population and the results combined
with economic, social, and institutional characteristics. Nevertheless, a strategy similar to the
Face of challenge of educational attainment among 15-year-olds would need significant
resources and facilitating collaboration. Goda, (2019) make an effort in this way by evaluating
indices of cognitive capacities in 11 SHARE-covered countries, such as those linked to economic
literacy. Their research of a population of participants aged 50 and above demonstrates that
cognitive skills are generally stronger in Northern Europe, diminish with aging, and are
positively related with a college degree. Furthermore, cognitive capacities vary significantly
among countries, age groups, and educational levels. Given the limited number of nations
covered by Share amounts, it is evident that understanding cross-country variances using Collect
information is not possible. As in lack of international microeconomic data, the preceding article
relied on a sample of business executives, the results of which have never been utilized to
research economic literacy or its causes. By utilizing such dataset has two benefits. Firstly, it
offers a consistent worldwide evaluation of economic literacy in 44 countries from 1996 to 2009,
providing for the measurement of literacy in relation to organizational and political factors using
a panel structure. Secondly, specialists with a global perspective are less susceptible to the reality
that people in various nations may utilize a variety of means of motivation. Such statistics have
restrictions, that they are mainly accessible in aggregate, disqualifying examination of individual
socioeconomic categories.

1.3. Indicator of Economic literacy

Another study highlights the IMD World Competitiveness Yearbook's (WCY) publication of an
economic literacy index. The index is calculated using data collected from international
organizations and a survey of major business executives who reflect a cross-section of a banking
industry as in countries evaluated. The chosen sample represents the production, service, and
major industries, and also the sample size is equal to every country's GDP. The survey questions
throughout this study are directed at top and middle managers, nationals or foreigners, working
in domestic and international companies in the country in consideration and who, on average,
have relevant experience and perspectives. The assessments are distributed in January and must
be completed and returned by March of the mentioned year. (Gottlieb, 2019). The study polled
over 4,000 business executives from 58 nations. The economic literacy question asks
respondents to rate a statement on a 0–10 scale depending on their level of economic literacy. 
By falling missing values for certain countries, the research structured a panel of 66 countries
from 1996 to 2009, explaining that 15 were in Asia, 8 were in Latin America, 16 were in the EU,
13 were longtime socialist countries, and 8 were in South Africa, the United States, Canada,
Australia, New Zealand, Norway, and Switzerland. Additionally, the research was focused on a
survey about education in finance that would only be accessible from 1998 to 2007 and requires
respondents to evaluate the remark that education in economics does suit the demands of the
corporate sector. Therefore, the indicator of economic literacy is much more directly connected
to the general level of knowledge in the community. Furthermore, the correlation coefficient
between the two measures is 0.91, and the author's primary findings remain same when the
indicator for financial education is used. The range of economic literacy around the globe is
shown in Figure 1, highlighting significant worldwide variances ranging from less than 4 for
Peru, Croatia, South Africa, Venezuela, and Mexico, to more than 7 for Singapore, Ireland,
and Finland. The majority of previous socialist countries have poor literacy rates (Cronqvist,
2015). This suggests that the background of economic development is significant and that a
minimum rate of literacy is connected with a reduced rate of credit market
and stock development. One disadvantage to adopting the WCY index would be that it presumes
the degree of economic literacy for each country informally through replies from managers and
nation experts, rather than through a systematic survey of people. The only statistic comparable
to WCY is SHARE, which has sufficient knowledge on cognitive capacities, along with a few
measures on economic literacy, at the individual basis for 11 European nations. The
characteristic similar to economic literacy in SHARE measures the capacity to operate basic
arithmetic operations and recognize essential economic concepts.

SHARE responders are asked specifically:

 To find 10% of a number

 To calculate the cost of a product that sells for half the price
 To calculate the cost of a new vehicle relative to the cost with a used vehicle and the fact
that the old vehicle is two-thirds the price of a new auto;
  To calculate the value of a checking account after two years of a 10% yearly interest rate.

Stolper et al. (2017) depicted Economic Literacy Ratio in the image below;

Figure 1: Economic Literacy

Source: created by author from: Stolper, O. A., & Walter, A. (2017). Financial literacy, financial
advice, and financial behavior. Journal of Business Economics, 87, pp. 581–643.
On the basis of such statements, Huffman, (2017) constructs an indicator. The indicator, which
varies from 1 to 5, is a ratio of the level of properly answered questions, and its design, as well as
the original questions that are supplied in the Appendix to the preceding research. Whereas the
SHARE variable is not really a perfect indicator of economic literacy since it only incorporates
very few economic concepts, there is a proof that numerical task knowledge is connected to
Economical results. According to Kahneman, (2011), more literate people are better at
complicated decision making, including financial ones who knows economic literacy. They also
tend to become more conservative, and thus more inclined to already have conserved and
invested in the previous studies. Karlan, (2012) discover that the amount of series has a
significant and strong effect on the economic test score, and so does academic achievement and
the amount of economics classes the respondent has taken, when they examine the results of a
25-item test of economic skills in the Cognitive Economics Study.

1.4. Model of Economic literacy

The economic literacy models described in this part are viewed as abstract representations of
reality, conceptualizing complicated interconnections and demonstrating interrelationships
among different variables. There are many models that attempt to conceptualize economic
literacy. According to research conducted in the United States and other nations, there is a link
between economic literacy and financial effect on the strategic advantage of rural tourism. The
economic literacy variable, on the other hand, was unable to mediate the relationship between the
environmental impact variable and the rural variable tourist competitive advantage (Huffman,
(2017).

Likewise, Lusardi, (2017) asserted that education level effects opinions of tourism, with less
educated individuals rating tourist activities favorably and more educated individuals rating them
negatively. However, this contradicts the results of Karlan, (2012) who found that less educated
persons did not recognize the advantages of tourism and rated it poorly, whereas those with a
higher education did. Environment literacy, a component of environmental education, is
examined in terms of desire to contribute for environmental features throughout the context of
new island tourism (Kornelis, 2019). With such a p-value of 0.048, the economic literacy
variable was successful in moderating the socio-cultural effect on tourism in rural competitive
edge. This supports the previous study hypothesis that the economic literacy variable was
successful in moderating the sociocultural influences variables on tourism in rural competitive
advantage. This is reinforced by some who argue that economic literacy includes the capacity to
handle personal resources properly (Lusardi, 2017). The growing relevance of economic literacy
is being driven largely by a range of social and economic impact elements that are now creating
a problem for the most European and other developed countries. That involves, among other
things, structural changes in economic services and the labor market that lead to a decrease in the
welfare state, as well as the most recent population changes. Notably, with such a p-value of
0.032, the economic literacy variable was also effective in regulating between both the variables
of stakeholder participation in tourism and rural competitive advantage. That's also consistent
with the assumption that now the variable of economic literacy influenced the variables of
stakeholder participation in tourism and competitive advantage in rural regions. Individuals with
a lack of financial awareness save very little and borrowed more. According to research
conducted in the United States and other countries, there is a link between economic literacy and
stakeholder participation in tourism rural competitive advantage, with individuals who are much
more economically educated being more inclined to participate in shareholdings (Martin, 2017).
Advanced economic knowledge, such as from an awareness of currency fluctuations, appears to
be especially important in predicting stock market involvement; yet, calculations and the skill to
do basic calculations are equally important. Individuals who are economically knowledgeable are
more likely to choose mutual funds with reduced charges.
 Figure 2: Theoretical Model Development Diagram
Source: Created by author from: Kumari D.A.T., Azam, S., & Khalidah, S. (2020). The Impact
of Financial Literacy on Women’s Economic Empowerment in Developing Countries: A Study
among the Rural Poor Women in Sri Lanka. Sociology, Asian Social Science

Another research explained the matter, stating that when individuals begin to use money as a
measure of success and interpret this as fear when a crisis occurs, the likelihood of experiencing
financial difficulties increases, indicating a decline in financial pleasure (Shefrin, 2020). The
conclusion of this concept was that, financial attitudes may influence how everything seems
depending on a person's moral, cultural, and personal views regarding financial decisions and
goods. Before this concept, few research have been carried to investigate the association between
financial attitudes and financial fulfillment. Despite this, studies continue to assume that
financial attitudes toward preparation don't really influence satisfaction (Sullivan, 2019). In
terms of financial management behavior study, one of its most prevalent characteristics
investigated from individuals is their ability to handle their own personal funds that is one of the
primary elements in attributing to financial comfort or financial difficulty (Shefrin, 2020). As
previously said, proper financial management can lead to both the realization of goals and
dreams by effectively completing one by one financial targets established before in order to
achieve them. Economic satisfaction may be defined as the sense of feeling extremely delighted
upon receiving something that has been desired for a long time or even the period of finally
being able to live comfortably after being overwhelmed by a financial crisis. As illustrated
below;

Figure 3: Model of Financial Satisfaction with Economic literacy

Source: created by author from: Yap, R.J.C., Komalasari, F., & Hadiansah, I. (2016). The Effect
of Financial Literacy and Attitude on Financial Management Behavior and Satisfaction,
International Journal of Administrative Science & Organization, 23(3).
The theoretical framework model described above was executed using a financial management
model based on the Deacon Family Resource Management Model (Sullivan, 2019). Financial
management behavior becomes the intermediary variable, because it was earlier influenced by
economic literacy and financial attitudes, but subsequently has become a predictor variables in
addition to economic literacy and financial behaviors in determining financial comfort. A most
significant factor affecting family financial pleasure is financial management behavior, which is
influenced by economical knowledge. Economical literacy has evolved into a component that
supports financial attitudes in terms of how an individual behaves toward his or her financial
management. Financial perspectives become the based proteomics or the final barrier of
decision-making, even if an individual really understands all information about financial matters
(Aftab, 2018).
Economic literacy encompasses the awareness, knowledge, skills, actions, and habits associated
with marketing. Individual economic concept is useful to avoiding miscommunication while
making sound financial choices.
Economic literacy enables people to achieve financial security. Their economic level of literacy
will meet a variety of demands, including elementary, secondary, and higher. According to the
study, it is satisfied as economic literacy is required in everyday life in order to make sound
financial choices that impact financial well-being. A high degree of economic literacy may be
shown by a comprehension of financial goods and ideas acquired via knowledge and advice, as
well as the capacity to detect and comprehend financial risks in order to make good investment
decisions. Financial comfort refers to a person's happiness with his or her own financial
situation. An individual who is financially satisfied is someone who is happy with his or her
current financial situation. Additionally, financial comfort is a personal impression that financial
resources are adequate (Ahmad, 2019).
Financial satisfaction may be quantified by examining an individual's perspective on his
earnings, handling his financial difficulties, fulfilling his necessary standards, whether he is in
debt or not, saving, assuring the amount of money in circulation for the future, and defining life
objectives. Thus, financial satisfaction is a dimension of society that is defined by a suitable
amount of economic assets. Financial comfort has been acknowledged as an element of life and
has gained praise in public health about stressors associated with a variety of difficulties,
including financial gaps, risk assessment concerns, role of organizational concerns, and work
concerns. Numerous variables, including financial knowledge and financial behavior, contribute
to financial satisfaction (Ahmad, 2019). As Mentioned in figure 3;

Figure 4: Model of Financial Literacy

Source: created by author from: Arifin, A.Z. (2018). Influence of financial attitude, financial
behavior, and financial capability on financial satisfaction, Web of science.
According to another study, economic literacy has an effect on financial behavior. Indeed,
economic literacy has a significant influence in determining wealth imbalance. Economic
literacy enables women to make strong financial decisions, save more now for retirement, handle
investments sensibly, and handle family finances more effectively. But at the other side, less
educated individuals rarely make smart decision and are thus more likely to suffer further debt,
save less, and react badly to fraud. Consequently, it is critical to establish the amount to which
women understand fundamental financial ideas and the amount to which their financial abilities
deteriorate. Additional researches have shown that women's economic literacy is often lower
than men's economic literacy (Akyuz, 2018). Such difference is difficult to describe since no one
reason adequately addresses the inequality in economic literacy levels between males and
females (Khawaja, 2018). Similarly, demographic differences do not adequately account for this
gender inequality (Khokhar, 2018). According to the model, the mean level of economic literacy
among women prefer participants is in the sufficiently literate group. This revealed that majority
have such a working understanding and confidence in financial service organizations and
financial commodities / services, including their characteristics, advantages, and hazards, as well
as their rights and obligations regarding financial items & services. Women are, therefore, less
competent and skilled when it comes to employing these financial goods and services. The more
financial information a person has, the greater and smarter their financial actions will be.
Economic education or literacy is required as the foundation for making everyday choices,
whether or not people manage a firm (Liu, 2020). The figure that is mentioned below,
summarizes the description of model.
 Figure 5: Output of Smart PLS3 Model Analysis
Source: created by author from: Shah, M.H., Murugiah, L., & Ahmad, N.A. (2020). Saving
Model under Financial Literacy. International Journal of Academic Research in Business and
Social Sciences, 11(2), 54–74
This model demonstrates that providing a good economic education from youth is the most
effective means of changing behavior later in life. Economic literacy should be taught to children
as early in the process so that they can use it in their everyday lives. Economic literacy in schools
has the potential to improve young people's financial abilities.

Another study focused on economic literacy, stating that economic literacy is characterized as

the capacity to handle somebody's personal finances and business finances with the necessary
confidence, knowledge, and skills. Economic literacy is described as the capacity to make
responsible economic decisions dependent on one's understanding of financial principles.
According to researchers, economic literacy has two dimensions: the first is the acquisition of
financial knowledge and training, and the second is the change of financial behavior. It is a
continuous process that occurs throughout the person's experience (Liu, 2020). Economic
literacy has an influence on the improvement of financial decisions made on an individual and
community level. Numerous variables have been discovered that impact an individual's degree of
economic literacy (FL), for example, the constructs used in prior studies include financial
knowledge (FK), financial attitude (FA), peer-group pressure (PP), and family influence (FI).The
mentioned Model is as shown in Figure 6;
 Figure 6: Model of Factors influencing the economic literacy
Source: created by author from: Thomos, B., & Subhashree, P. (2020). Factors that Influence the
Financial Literacy among Engineering Students. Procedia Computer Science, 172, pp.480–487
Researchers have highlighted the importance of financial socialization in determining an
individual's degree of economic literacy. While the peer group, Family, school, and media are the
primary socialization agents. Any one of these agents of socialization will have an effect on the
person to the amount to which they are exposed to them throughout their youth and early
adulthood that is;

 Both formal and informal contexts provide possibilities to improve economic literacy.
For example, formal schooling provides possibilities for economic literacy.
 Informal education chances by contact with family and friends.
 Direct access to the usage of financial services like as bank accounts will help in gaining,
and in acquiring economic literacy (Park, 2018).

Several aspects, including the establishment of a financial goal, dedication to the objective,
discussion of financial concerns with family and friends, and independent hands-on involvement
with the financial transactions, all contribute to the performance of financial education programs.
Economic literacy and financial performance are favorably associated, although their causal link
is questionable. Economic literacy has an effect on financial behavior, and financial behavior has
an effect on economic literacy (Saraswat, 2018).

1.5. Influencing Factor of Economic Literacy

Yeboah, (2017) discovered that youth working class people had varying levels of economic
understanding, attitude, and action. They discovered that socio-demographic characteristics
mainly impact economic literacy. Achtziger, (2015) used social business strategies to affect
financial decisions. Alexander, (2017) defined important elements as both internal and external.
According to Aw (2018), household decisions are influenced by circumstance and economic
situations. Bianco, (2011) investigated how women's age and marital status affects their
investing patterns. Brown, (2016) highlighted the importance of economic education. Donnelly,
(2016) highlighted the significance of economic literacy in developing-country research,
and stated that economic literacy of individuals rewards them in prioritizing financial objectives,
recognizing benefits and risks associated with particular financial products, and selecting them
for investment purposes. The researcher explained the need of converting savers into investors
for national growth mostly through economic literacy. Durvasulu, (2010) showed that married
women were much more at risk as compared to married males.

 Socio-demographic factors

Social influence is that the use of social power by an individual or organisation to affect the
attitudes or behaviours of other individuals and groups in something like a desired direction
(Fernandes, 2014). Social influence has previously been used to refer both parental socialisation
and peer involvement. Numerous literatures have recognised the importance of family members
in the financial socialisation of children, suggesting that although parents have a significant
influence on their children's financial behaviour, so Parents should serve as a leadership role for
their children in handling their financial matters. Harnish, (2018) continued by stating that
economic socialisation, namely discussing money with family, has an effect on child's
developmental orientation. In several other terms, children who seem to have a positive
connection to their family are much more probably to be future-oriented and have responsible
economic decision. Islam, (2017) revealed that the importance of parents in young people'
economic development is considerably larger than the influence of job standards and excellent
school economic knowledge. Family members and parents ' peer assistance is essential in
assisting young adults and teens in delivering an effective adult life. When parents exhibit
excellent financial conduct, they serve as financial role models for their children and develop
favorable beliefs and practices in youngster’s future life. Kasser, (2018) discovered that parental
characteristics are strongly associated with credit card difficulties and credit card debt among
college students in the U.S. Of all of the other parenting characteristics examined, parenting
facilitation may have had the greatest impact on college students' credit card use. Families who
teach their children regarding financial management, budgets, and debit cards either through a
hands-on strategy could further encourage them to restrict their credit card use within college.
Khare, (2015) continued by stating that childhood has been the most important stage for an
individual's behaviour and attitude in maturity. As a result, parents have a significant role in
influencing financial management of children. Apart from parental influences, peer influence
may also impact an individual's financial behaviour. In Malaysia, it was believed that the most
evident cause that ruined the young people' financial management was social pressure, as
illustrated, household debts are self-identity. In addition, further arguments, supported by Klontz,
(2011), who discovered that people with common preferences are more likely to relate to the
identical group, consequently creating a relationship between team and individual behaviour.
Researchers found that peer effects have a significant impact in university workers' personal
savings choices in the United States.

Another study was undertaken at the NASD Investor Education Foundation in the United States
of America to investigate the demographic and economic aspects that influence financial
decisions. Kuknor, (2017) performed a survey of 280 UAE investors to investigate the variables
impacting their investments choices and their link with economic literacy. Professional
involvement, income levels, and training were all important variables in determining economic
literacy. Considerable disparities in economic literacy were discovered based on gender. Men
were discovered to be more economically literate as compared to women. As statistical methods,
regression analysis and one-way ANOVA were utilized. Kuknor, (2017) discovered social and
economic characteristics such as gender, age, and salary. Limbu, (2017) performed a research to
examine the characteristics impacting aspiring professional accountants' economic literacy levels
in South Africa. The research instrument was created on a global scale and researcher discovered
that gender, age, income, race and language, are only a few of the elements that impact economic
literacy. Researchers discovered parameters impacting economic literacy that were comparable
to those described in international research. Lynch, (2018) investigated the relationship between
the demographic characteristics of economically deprived persons and economic literacy in
Kerala By developing a hypothesis, the connection of socioeconomic parameters such as marital
status, age, gender, caste, family and personal salary, and the amount of kids with total economic
literacy was statistically examined. Mean, ANOVA, percentage, chi square measurements,
and Two Samples' T-test, were used, and Kerala had a high economic literacy rate where
financial decisions were made collaboratively in the household. Geographic inequalities in
economic literacy were discovered, and it was found to be significantly connected with income
and education. Because of the existence of SHGs, the participants under research had a high
degree of economic literacy. Mathai, (2016) investigated the association between demographic
characteristics and economic literacy in their research performed in Pakistan. Economic literacy
was shown to have a strong connection with a variety of demographic characteristics such as age,
employment, qualification, and marital status. Married, well-educated, older, and in business
were more economically literate. Paul, (2017) studied Malaysian undergraduate students to
determine the association between demographic characteristics and economic literacy. Peltier,
(2016) discovered that women's marital status and age impacted their investing behaviors. When
relative to younger and unmarried women, older women favored secure and less risk
in investments. Married women have much more obligations than unmarried women, thus they
are less willing to take risks. They try to find a balance between all the risks involved and the
expected return on investment. Younger women, on the other hand, are more willing to take risks
and have a better understanding of finance, risk, and profit. They preferred for mutual funds and
stocks. Qamar, (2016) discovered in a sample of 212 investors in city Pune that gender, age,
income, gender, income, educational level, marital status, and profession all affected their
decision of Alternative Investment.

Various studies have shown demographic disparities in attitudes about money, most notably by
gender (Sari, 2017). Taiwanese university students vary in their views and practices around
money according to their age (Singh, 2018). According to research conducted in Korea as well as
other countries, the family relationships, the education of parents and career, and family income,
as well as life in a metropolitan region as compared to a less urban environment with less
shopping options, may all influence conserving attitudes and behaviors (Skagerlund, 2018).
According to prior research, being female, older, having parents with a better standard of
schooling, having a greater family income, and residing in a bigger city are all associated with
favorable attitudes and actions toward saving (Taylor, 2016). Previous research indicates that
attitudes and behaviour about money vary among societies and populations. Not unexpectedly,
Asian university students have divergent opinions on money when related to cultural Asians in
other nations and to Caucasian students in English-speaking nations. While both great savings
rates and materialism attitudes are prominent in East Asian civilizations (Trombetta, 2016), such
two values may act as counter-balancing forces, having materialism lowering saves rates. When
Asia's working class grows and the world economy becomes more connected, it is essential to
understand the saving behavior of Korea's young people. Financial education is favorably
associated with saving behaviour among the next generation of Korean leaders and consumers.

 Effects of Knowledge on Attitude-Behavior

Economic literacy on its alone is insufficient to have a successful adult life. Rather than that, it
must be accompanied with positive feelings and knowledge in order to assist individuals,
particularly young people, in making better decisions. Yahaya, (2016) claimed in their research
on the influence of parents, job, and learning on first-year college students' financial socialisation
that economic literacy was essential in determining financial perspectives, which led to good
financial behaviours. Such result enhances the hierarchical connection between knowledge and
practice and implies that economic literacy does indeed have a direct impact on its financial
performance. Zachary, (2018) discovered that although one's degree of economic literacy may
not immediately influence their financial decisions, but having financial understanding promotes
their attitudes for good financial behaviors. Cronqvist, (2015) hypothesized that economic
literacy has a large beneficial influence on saving behaviour. Such type of researches, however,
did not address directly to economic literacy, it may influence a savings behaviour of individual
or may be not addressed.

 Psychosocial factors

According to the researchers, the association between psychosocial risk on the financial
performance and literacy is an important field of study. An increasing collection of prior research
shows that these characteristics may explain a significant amount of variance in other aspects of
economic well-being and behavior. Many analyses have revealed, for example, that factors
including such specific time perspective and retirement effective communication can give an
indication of the diversity in retirement planning and safety. The impacts of various psychosocial
factors on savings must be tested. Whereas economic literacy is a possible predictor of
retirement security, it really does not assess retirement security. Previous research has suggested
that factors be projected on retirement savings and see which elements are better to predict
retirement security and thus more correctly anticipate the practical effects of psychological
characteristics (Taylor, 2016). Previous papers have also focused on psychological factors that
may be assessed with the HRS, such as financial comfort, depression, and religious. Although
past research have hardly directly discussed those characteristics in the field of
economic literacy, which has shown numerous possible mechanisms by which those aspects may
relate. Despite the fact that numerous papers investigate whether financial satisfaction, despair,
and religion are strongly connected to financial literacy, but the direct pathways are not
investigated. The association between depression and economic literacy may also be inverse,
with low economic literacy increasing negative emotions. According to the concept of learned
helplessness, unavoidable experiences reduce people's ability to modify their condition
(Gathergood, 2019). Although it has not yet been linked to retirement security and
economical decision-making, one might fairly expect that poor economically educated persons
may have greater difficulties in developing finance and may also has lack confidence that they
can alter their financial situation. Goda, (2019) found that psychological characteristics such as
precaution, conservatives, lack of confidence, intellectual inferiority complex, and lack of
optimism affected investment decision by using descriptive, logistic, analytical, and multilayer
analyses on various brokers in their studies.

Gottlieb, (2019) on the other hand, included economic addiction as additional component and
eliminated optimism from their study. They considered environmental and psychological aspects,
as well as the amount to which they affected the financial decision. The researchers proposed the
theory of irrationality besides stockholders and investigated the behavior for providing economic
investment decisions. A few factors, such as liberalism and under confidence, were
accurately found in previous literature, but behavioral factors such as propriety and precautious
mindset, as well as informational asymmetry, had not been viewed in past works in the context
of previous researches.

 Financial knowledge, behavior and attitude

The NASD Investor Education Foundation (2006) in the United States performed a research of
922 U.S. households with an earnings of $85,000 or more and discovered that components of
financial securities, financial planning behavior, entrepreneurial intention, and parents greatly
affected their financial investment and financial decisions (Goda, 2019). Huffman, (2017)
investigated the issue of improved economic literacy for working women in Punjab district
Pakistan.  Researcher concentrated on learning about financial planning, investment strategy, and
variety. She discovered that their investing behavior was impacted by their financial
performance. A link between strong economic literacy and age has been discovered. Huffman,
(2017) developed a hypothesis to investigate the impact of a shareholder's financial knowledge
on the decision of investment opportunity. The significant values of Spearman's correlation were
obtained to verify it. According to the findings of the previous researches, economical awareness
and knowledge impact investor behavior and money management. Kahneman, (2011) discovered
that women exceed males in terms of financial behavior. They concentrated on increasing family
members' participation in economic decision making in order to raise their degree of
economic literacy. To improve economic literacy, financial decisions must be made in
cooperation with many other family members. According to Karlan, (2012) who conducted a
study in the Kamrup area of Assam, a person's economic literacy degree is determined by his or
her financial requirements and behavior. This study conducted by selecting 99 women from rural
and urban regions and by using a structured questionnaire. To figure out the difference in
economic literacy levels, 50 working and 50 non-working women were selected from both
communities and that were chosen at random. The T-test was used to determine the degree of
importance for the concept of urban and rural economic literacy disparities, as well as
inequalities between working and non-working women, and to find this, the analysis in form
of tabulation and percentages were selected. 

Kornelis, (2019) defined economic literacy as a mixture of different components that is

Economic literacy knowledge, financial attitude, and financial conduct. According to the
findings of the investigation, financial attitude and economic literacy knowledge have a
beneficial impact on financial behavior. By combining these three components, the author
created models and performed evaluations for measuring economic literacy among university
students in Southern Brazil. Dataset from 545 university students was used as a sampling for the
research. While, Structural equation modelling was used using two methodologies.  It was
discovered that financial attitude and economic literacy knowledge had a beneficial impact on
financial behavior and were chosen as the proposed accuracy. In previous researches there was a
gap regarding different features that were not finalized. As a consequence, the findings were also
invalid to a wider community. In the event of increasingly sophisticated and innovative financial
products, economic literacy may be required. Through all the National Strategy for
Economic Education, the Central Bank and the Federal Government developed
economic literacy in Brazil. Students of Brazilian institution were allowed to create long-term
financial objectives for savings and expenditure. Economic literacy  knowledge highlight
the questions such as about interest, rising prices, costs and benefits from various assets, and the
relevance of financial attitude that had a beneficial impact on financial behavior. Lusardi, (2017)
Organization for Economic Cooperation and Development OECD INFE performed a pilot
research on economic literacy in 14 nations by designing a questionnaire. The study's goal was to
assess financial knowledge, financial attitudes, and financial conduct in order to develop
strategies to make a connection between economic education and financial performance. A
survey was conducted inside and between nations based on socio-demographic criteria such as
gender, age, and income. Many nations reported a lack of economic understanding. Financial
behavior may be modified with time. Financial attitudes differ tremendously. Martin, (2017)
studied 80 investors in Barpeta, Assam, to determine the variables impacting economic literacy.
The data was selected using the stratified random sampling approach. The proportion had been
used to determine participants' degree of knowledge about financial products. Kahneman, (2011)
identified economic literacy aspects in study as knowledge, behavior, attitude, and practice for
financial concerns, with socio-demographic aspects being the most significant. Life experiences
and mortality rates.  Shefrin, (2020) addressed how women have a greater life expectancy than
males and earn less. Martin, (2017) explained Women's economic literacy knowledge, attitude,
and behavior were determined by their own past experiences.

Many research have shown that a lack of economic literacy is caused by a lack of economic
literacy knowledge. Some countries concentrate on how to increase their economic literacy
through education. Various economic knowledge pertaining to financial behavior and financial
attitudes. The knowledge on current products and services is employed as an indicator in
evaluating economic knowledge. The more people know about recent goods & services, the
better their economic literacy will be. The next factor that should be evaluated in financial
knowledge is economic education. Basic understanding of economic literacy includes concepts
such as value of money, rising prices, debt, risk categorization, and the effort and reward
principle. Savings and retirement knowledge, and also some financial management, are also
necessary as financial knowledge that affects how much a person does in economic literacy
(Sullivan, 2019). Estimating and purchasing given the risk of the item, trying to fix risk and
return maintenance, all have an impact on economic literacy. Finally, financial knowledge
influences a person's view and perspective. Economic literacy is linked to the concept of
behavior. A person's financial behavior may be assessed by their action in handling basic
income, saving behavior connected to their earnings, consumption behavior, and investing
behavior. Some individuals are good in protecting financial portfolios as a mixture of diverse
behavior that provides a high return while being low risk. For a well-educated person, the best
solution for equalizing risk and return in diversification is the great decision (Aftab, 2018). As a
result, the financial portfolio and diversification strategy will have an impact on economic
literacy. Financial behavior may also be expressed as an individual's engagement in purchasing
financial products, such as securities, bills, cash, stocks, institutional investors, gold, bank
deposits, saving account, or none. Economic attitudes and financial training are two more factors
that impact economic literacy. Financial attitude is determined by one's attitude regarding
financing and investment responsibility. People who have obtained financial training have
greater financial understanding and will make better decisions, making them more economically
literate (Ahmad, 2019).

 Marital Status and Income

Several studies show that married status and income effects the economic literacy, persons in
married status are more motivated to attempt to accumulate money, for example, by investments,
retirement funds, and long-term plans. Individuals with a greater income, greater standard of
profession, and wealth are more likely to be interested in certain financial product, such as a
retirement, insurance, financial sector component, capital asset from a business standpoint, like
bond, stock, and so on. Various nationalities imply different countries; a developing country
cannot be more like a developed or underdeveloped country. People in developing countries
continue to have a greater desire to build the nation by physical infrastructure, but they have less
capacity to appreciate financial markets, a lower educational background, and a lower per capita
earnings (Akyuz, 2018). Previous studies also show that persons with varying personal levels
have varying levels of economic literacy. When individuals have varied motivations, attitudes,
views, intentionality, and Internet access, it results in different economic literacy actions. People
of various religions have varied perspectives on financial products and markets. Those of the
Islamic faith who are interested in Islamic products with a function that comes from their God
tend to have various economic literacy than people of other religions. Several research have also
shown that family is a component that influences economic literacy, such as parent's education,
parent's profession, and family perspective. These characteristics will have varying effects on an
individual's economic literacy (Khawaja, 2018).

 Satisfaction and Behavior

Financial awareness, along with financial contentment and financial conduct, is one component
of a person's financial wellbeing, explained by Khokhar, (2018). According to Liu, (2020),
greater economic literacy knowledge has a positive impact on financial behavior, which
including managing income, becoming acclimated to saving, preparing pension funds and
investments, and budget management for someone who can improve their financial possibilities,
which relate to financial satisfaction. Previous research has shown that economic education has a
favorable influence on financial behavior and financial pleasure. According to Park, (2018),
financial pleasure entails a healthy, joyful, and unconcerned attitude about one's financial
situation. According to Khokhar, (2018), financial satisfaction suggests that an individual's
financial situation is favorable and that individuals are pleased and free of anxiety about their
own financial situation. According to Liu (2020), financial satisfaction is a person's pleasure with
his or her own financial situation. According to Park (2018), financial satisfaction is a person's
appraisal of their present financial condition. According to Saraswat (2018), economic
satisfaction has three components, the first is financial efficacy, which is the efficacy of
resources to support the economic viability; the second is considered economic well-being,
which really is a value judgment of the economic viability; and the third is satisfaction with a
standard of living, which is the view of a person's ability to meet the financial potential.
According to Yeboah (2017), financial satisfaction is an assessment of the gap between desiring
and real economic condition. The greater the gap between desire and actual financial state, the
greater the financial desire accomplished, and the greater the economical satisfaction. According
to Saraswat (2018), financial satisfaction is connected to real financial situations such as income
and wealth, as well as subjective economic demands. In all other words, those with financially
strong awareness will engage in positive financial behavior and certainly contribute to financial
satisfaction (Achtzigar, 2015). Increasing education is one aspect that may boost stage of
economic development. Personal economic knowledge will improve as more people gain
education since they'll be able to select different financial instruments such as credit cards, debit
cards, pay checks, bonds, securities, and so on that will check the system or investments easier.
People will also be increasingly concerned about their security. As a result, people will strive to
learn more about measures to protect their investments (Alexander, 2017). They also have a
greater responsibility for financial planning (responsible financial activity) than those with less
earnings management (Aw, 2018). A lack of financial awareness will result in debt, credit
difficulties, poor savings rates, and impulsive purchasing satisfaction (Bianco, 2011). According
to Brown (2016), financial behavior is a human behavior connected to managing finances.
According to Donnelly, (2016) financial behavior is a mixture of cash flow management,
sayings, credit management, savings, and investment. According to Achtziger, (2015), financial
behavior is connected with one's financial management duties. Developing a budget, assessing
the necessity for debt purchases, and repaying debts within a realistic time period are all
examples of effective financial management. According to Durvasula, (2010), financial behavior
is a person's attitude and conduct when it comes to managing their resources. In the study,
spending and saving behavior is employed as a standard. Fernandes, (2014) examined financial
behavior in terms of how individuals handle, manage, and utilize their current financial
resources. Harnish, (2018) defines financial behavior as spending, bill payment, financial
planning, providing money for self and family, and their saving. According to Harnish, 2018b),
there is no significant link between financial knowledge and financial behavior. High economic
literacy knowledge may increase individuals' ideas of more responsible financial behaviors,
however people may not always behave in order to achieve goals while managing finances.

 Social Media Usage

Consumers are becoming more impulsive as a result of a variety of circumstances. The internet is
now something that people from different walks of life are familiar with. The growth of the
internet is marked by the phenomena of Instagram social media, which grew in the community,
particularly among teens, and is now a part of the growth of existing new media. The
introduction of Instagram social media promotes design and food suppliers and distributors to
utilize Instagram as either an opportunity in undertaking e-commerce since it is regarded
effective and affordable. Instagram's rising popularity as a picture and video sharing app has
prompted several users to engage in internet shopping to advertise their items through Instagram
(Islam, 2017). Based on the data collected, it was discovered that there are certain online shops
on Instagram that also have a physical store. This occurrence demonstrates that Instagram is
utilized not just to ease online transactions, but also to advertise and reveal opinions to Instagram
users, particularly those who follow online shops. The shopping environment variables may also
contribute to hedonic character in customers, who prefer to purchase without prioritizing the
shopping priority in keeping with their requirements. Individuals that engage in excessive buying
activities to satisfy their own desires are said to have a hedonic buying purpose. The structure of
the hedonic purchasing motivation will be generated by shopping while traveling about and
selecting chosen things, or by visiting certain online stores on websites, Instagram, Facebook,
and Twitter. According to Kasser, (2018) three factors influence economic literacy ability in
social media activity: First is sociodemographic which, men are given a higher economic literacy
skills than women. Secondly, family background in which a mother's education in a family has a
good effects on economic literacy, and peer group, organization or group of people will actually
impact economic literacy of both co - workers. This demonstrates that the economic literacy
variable has no significant role in the effect of hedonic purchasing motivations, and hence it is
unable to diminish or lessen the incidence of students' impulsive purchasing. A high level of
economic literacy doesn't really ensure that a person will be able to resist hedonic purchasing
incentives for spontaneous purchases. Hedonic purchasing reasons emerge from inside a person
as a consequence of external stimuli also including discounts, promotional material, excitement
about new products, and the desire to follow fashions, peer pressure, and so on (Khare, 2015).

 Employment Status

Individuals' occupational position was a major predictor of economic literacy in the group of
those who have been actively working or self-employed were far more likely to provide correct
information to the economic literacy questions. Individuals in some type of job were 40%, 44%,
and 19% more likely to be offered right responses to the interest rate, price, and investment risk
questions respectively, than those who were presently jobless. Change in economic literacy
between employed and self-employed people were insignificant and statistically insignificant.
Respondents' economic literacy levels were also shown to be related to family wealth.
Respondents were requested as to if they owned assets, at least one residence, and had retirement
funds as a measure for wealth (Klontz, 2011). According to previous research, those with some
investments were 33 percent, 30 percent, and 16 percent more likely to pay attention
appropriately to the interest rate, wage growth, and risk diversification answers respectively,
those with a house were 12 percent, 17 percent, and 14 percent more likely, and those with
savings accounts were 5 percent, 17 percent, and 9 percent more likely to pay attention
appropriately to the interest rate, interest rates, and risk diversification concerns. This data was
statistically significant. This relationship might also be explained by confounding variables, in
which persons with greater economic literacy are more likely to accumulate money effectively
by making more educated financial choices (Kuknor, 2017).

Other factors as established and found from reviews;

 Age, business education, risk and economic literacy

According to Limbu, (2017) successful candidates have a better understanding of financial and
investing concerns than non-business majors. Lynch, (2018) agreed with previous researches and
discovered those who are more economically literate, older in age, and from the business class.
Mathai, (2016) investigated the idea that older people were more averse to risk, preferring safe
and less hazardous investments than unmarried and young females. Paul, (2017) discovered that
in a research done to learn about economic literacy in the Ernakulum district of Karnataka, 40
young women workers were aware of potential possibilities but were not prepared to take use of
them. They favor Systematic Investment Plan (SIP), yet they do not have a bank account.

 Economic education, and training

According to Peltier, (2016), the primary reason of economic illiteracy is a lack of knowledge
about financial goods. As a result, they were unable to prepare for pension. Lynch, (2018)
believed that financial dependence affected investor trading behavior in the stock market. Qamar,
(2016) investigated financial education and reported that learners enrolled in Business
administration financial courses were much more economically literate as compared to students
enrolled in the other courses. Students who took financial education classes are much more
economically literate. Those who seek financial education courses will become more efficient in
making financial decisions. Economic awareness and knowledge impact investment behavior
and financial planning, according to Sari, (2017). Financial knowledge is an important
component of financial literacy, but it cannot yet be used to define economic literacy (Singh,
2018). Economic literacy is an important component of someone's life since it is a beneficial way
of making educated financial decisions; nonetheless, evidence in many countries reveals that
economic literacy is still relatively low (Sari, 2017). Skagerlund, (2018) discovered that lack of
financial understanding leads to incorrect financial goals and bias in the pursuit of happiness in
the unproductive age. According to some experts, economic literacy is the information, talents,
and kepapak a possessed by others in managing funds, which may be utilized to make good
financial decisions. Students must have the following financial knowledge: Fundamental
Knowledge of Financial Management, Money Management, Accounting, and Saving. Which can
build knowledge of each pupil in choice making in each aspect. An individual's economic
literacy capability will result in the establishment of material wellbeing. According to several
research, there is a link between salary and financial literacy. As previously stated, persons with
weak English proficiency earn less than the general population in the United States. According to
a 2008 survey of youth’s American adults conducted by the JumpStart Partnership for Private
Financial Literacy, participants whose family income seemed less than $30,000 per year earned
an estimate of about 44% on a test of basic financial fundamentals, particularly in comparison to
about 55% for people whose parents earned more than $90,000 per year. Researchers talked with
some financial products and services to immigrant populations who said that low-income people
may not even have access to services like training institutions and Web pages that might help
them improve their financial skills and general economic literacy. According to the National
Council of La Raza's financial education study, many Hispanic low-wage workers with restricted
work schedules or full time employment were restricted in their ability to engage in
economic education programs (Taylor, 2016).

 Confidence , numeric ability and economic literacy

According to Trombetta, (2016) women prefer the subjects of English and humanities, while
males priorities mathematics and science. According to Yahaya, (2019) women have a poor
degree of economic literacy and less confidence as compared to men. Zachary, (2018) observed
that males had higher confidence in financial management than women. Economic literacy was
found to be poor among elderly women in the United States, and the majority of them had not
prepared for retirement.

 Investors preferences, Investment pattern & economic literacy

Cronqvist, (2015) commented on previous study and assessed economical literacy in Gujarat
state by administering a performance exam to respondents and classifying them as investors.

 Inadequate economic literacy.
 Having a relatively high degree of financial knowledge.
 Using statistical methods, researchers studied demographic parameters, investor
preferences, and investment patterns for several alternative possibilities.
 Chi-square analysis, binary logistic regression, simple regression, and correlation were
performed to determine the effect of economic literacy on investor behaviors (Cronqvist,
2015).
 Type of family and economic literacy

Gathergood, (2019) surveyed 4000 persons in India to determine economic literacy levels among
different demographic groups that is retired workers, young workers, and students. Goda, (2019)
examined the association between multiple characteristics of economic literacy on working
young employees, including financial knowledge, financial behavior, and financial actions,
and in their study economic literacy between Working Young employee. It was determined that a
variety of sociodemographic and environmental factors were involved. While demographic
factors have a comparable impact in other nations, contextual factors such as single or joint
family structure and financial decision-making have a profound impact on economic literacy in
India.

 Family Influence

Family influence has a good impact on economic literacy. Parents have an impact on their
children's and young adults' economic literacy. Pocket money provided to the children by parents
has been proven to be an excellent strategy for teaching healthy financial skills to young children
in an appropriate way. Individuals benefit from their parents' financial training because they have
more financial confidence. Students' economic literacy was linked to the conversation of money
problems between parents and children. In certain circumstances, elder siblings have a financial
effect on their younger siblings. Causal economic trainings could be uncommon in the
framework of the family, but indirect family communications provide greater financial learning.
Economic educators and home life educators have also greatly improved the quality of parents in
improving their children's economic literacy. The debate of the participation of family in
determining their children's economic literacy level is justified by Social Learning Theory
(Gottlieb, 2019).

 Peer-group Pressure

Individuals' economic literacy level is explained by financial socialization in schools and

universities. As college students and youngsters spends more time with their friends, peer group
impact becomes much more important in increasing economic literacy. Positive interactions with
one's own peers and the community provide an environment favorable to increasing one's
economic literacy level (Huffman, 2017).

 The role of culture

As various cultures have different conventions, attitudes, and experiences with money,
and cultural variations may play a role in economic literacy and the management of financial
affairs. For example, in certain cultures, spending money and holding debt is disapproved upon,
which may discourage immigrants from certain cultures from borrowing money to buy houses or
automobiles and establish credit scores. Freddie Mac performed focus groups with Asian
home purchasers, and the majority of participants showed an objection to debt, with some
indicating that they are used to paying cash rather than just using credit cards even though they
dislike being in debt. Religious beliefs may also have an impact on how people handle credit.
According to the Lutheran Immigration and Refugee Agency research, Muslims who follow
religious restrictions against obtaining and giving interest face difficulties engaging in standard
financial products such as house loans and retirement funds (Kahneman, 2011).

1.6. Self-Control and Impulsive Buying as Results from Economic Literacy

Most of the arguments presented above are relevant to defining, categorizing, and understanding
the idea of Economic Literacy. However, one feature comes out that has not been explored
though and is the consequence of Economic Literacy effort, the goal of Economic Literacy,
and namely Economic Literacy production. Economic education in schools tends to concentrate
on knowledge rather than attitude (Karlan, 2012). As a result, students from both institutions
with scientific majors had a favorable financial attitude. Students who take scientific degrees in
high school are more likely to save and spend sensibly. While kids in elementary school are less
likely to see money as a source of power and status, they are also more likely to resist from
purchasing items whenever they do not have the cash. Furthermore, it was discovered that pocket
money was adversely associated to financial understanding. This contradict motivation and
work, which revealed that those with more pocket money had a better degree of economic
literacy skills (Kornelis, 2019), Whereby the increasing in pocket money is thought to provide
the chance to engage in more investment operations, and this has emerged as a positive factor
that affects the amount of economic literacy awareness. Educators' self-control was graded in the
poor category, with an average score. Because high school kids are emotionally vulnerable as
teenagers, a few of them find it much more difficult to regulate behavior (Lusardi, 2017). Aside
from that, Marthin, (2017) claims that inability to regulate oneself might be caused by inadequate
of financial objectives. This research discovered a great differences in pupils' self-control
depending on their school qualifying grade score. Those in lower grades exhibit stronger self-
control than students in higher grades. Low-grade school pupils found it relatively simple to stop
poor habits, they attempt to neglect laziness and are strong enough to resist desire and they also
have fewer difficulties with concentration. However, students with social majors exceed those
with scientific degrees in terms of self-control. They were noted to have less difficulty focusing,
to be more conscientious, to be capable of resisting temptation, and to be great at hiding
information. The correlation test yields findings that are comparable. Self-control is favorably
associated to program major and school passing grade score. Kids pursuing a social major and
students in the lower grades have more self-control. Students have a modest degree of financial
awareness. Those in high school have such a better economic attitude than students in lower
grades (Kornelis, 2019).

Previous research has shown that culture impacts economic literacy and self-control among
teenagers to varying degrees and via various mechanisms. Previous research has shown
considerable disparities in the adult community's economic and financial behavior across this
language issue. The researchers discover significant disparities in economic literacy and self-
control between students entering French and German speaking schools. Students attending
German-speaking schools exhibit greater economic literacy, as shown by their replies to a
standardized set of economic literacy questions along with their personal judgement. Children at
German schools are even less likely to consider consumption purchases and preserve a greater
portion of their regular financial resources, and this behavior suggesting more self-control. A
mediation study demonstrates that systematic variation in financial behavior and financial
education, rather than difference or risk attitudes, in accounts for the impact of culture on
economic literacy and self-control. According to the researchers, financial education is the most
important mediator along which society translates into differences in economic literacy (Karlan,
2012). Researchers discovered that economic perspectives are the most powerful cultural
mediators of self-control. Depending on the outcomes of statistical analysis that use the SPSS
22.0 programed, the t-test for psychological skill variable and economic literacy variable is 6.985
and 5.598, respectively, which is statistically significant because the p-value from both t-test
results was possibly a bit lower than the total p-value of 0.0000,06. Various studies have shown
that emotion and economic literacy have a favorable and substantial influence on financial
behavior.

Figure 7: Data Result

Source: created by
author from: Maylin, S.,
Praya, J., & Ghosh, A.
(2019). The Impact of
Emotional Intelligence
on Work Life Balance
among Pharmacy
Professionals in Malaysia.
International Journal of
Management and Human
Science (IJMHS), 3(1), pp. 29-34.
Previous research has examined the emotional factor and economic literacy, as well as their
effect on Impulsive Buying, and finding of study hypothesis measurement indicate that the
statistical t-score for emotional stability is 6.965 and for economic literacy is 5.598 with a p-
value of 0.000 that is less than 0.05. Thus, it can also be suggested that emotional opportunity,
which is comprised of self-awareness, consciousness, inspiration, empathy, and interpersonal
skills, as well as economic literacy, which is comprised of understanding and decision-making
that depending on theoretical concepts, also have a beneficial effect on financial behavior.
Economic literacy knowledge and awareness are insufficient to effect change in Impulsive
purchase. As a result, it requires self-control, drive, and social skills to help learners and
to manage their money more effectively (Lusardi, 2017). Apart from improving economic
conduct, self-awareness may also postpone individual fulfilment and direct emotions toward
satisfaction decision and attitude formation. It may be inferred that the economic literacy and
emotional skill variables contribute to the development of student financial behavior. Economic
literacy and emotional capacity are both of moderate importance in terms of enhancing children'
financial management. Economic literacy alone will not enhance an individual's economic
behaviors, because just as knowledge alone will not improve a person's conduct. The
characteristics of emotional ability factors with the greatest score may greatly influence an
individual's economic behaviors. It is generated by the desire inside him to act carefully in terms
of money management. Students always need self-control in order to delayed individual
satisfaction and concentrate their thoughts toward choosing satisfaction and establishing the
mood (Marthin, 2017).

Another study's findings demonstrate that an economic literacy approach may result in a
substantially significant rise in self-control, especially among low-income individuals. People
with stronger self-control may be able to break out from a cycle of financial difficulty (Shefrin,
2020). Future studies should look at the technique that is causing this. It is possible that certain
parts of financial counselling, such as lowering financial anxiety, adopting a budget to facilitate
decision-making, or managing transactions, have a higher influence on critical cognitive function
than the others. Additionally, it is possible that now the training resulted in further psychological
states, such as motivation overflow or increased self-efficacy (Sullivan, 2019).
 Figure 8: Income level Data Result
Source: created by author from: Tumataroa, S., Hare, D.O. (2019). Improving Self-Control
through Financial Counseling: A Randomized Controlled Trial. Journal of Financial Counseling
and Planning, 30(2), pp. 304-312
The graph above suggests that respondents' personality, risk-aversion and debt attitude did not
alter throughout the course of a few months that is mentioned in graph. The training group
reported a modest increase in their economic circumstances as compared to the control group,
but both groups reported a comparable low in economic hardship that was irrelevant to the
intervention study. This example suggests either that the respondents in the control condition or
individuals in the experimental condition may also have seen expectation implications (Aftab,
2019) perhaps a month may not always be long enough for major financial changes to happen.
Respondents exposed to the strategy showed an increase in their economic literacy,
and suggesting that they are still in the evaluation or preparation phases of behavior change,
rather than with the reaction or requirements phase, wherein the goals are much more likely to
transfer into behavior (Ahmad, 2019). People are unlikely to make significant behavioral
changes only in one month. Figure 8 illustrates the large improvement in economic literacy
knowledge as a consequence of the planning intervention, and it emphasizes economic education
as a key element of family planning programs on which financial practitioners may concentrate
their energies.

Another research found that economic literacy is a component of financial ability, as explained
by Akyuz, (2018). However, Sherfin, (2020) proposed a more complex link between economic
literacy and financial ability, highlighting that a person might be financially competent even if
they lack the economic literacy as required for this research. The surveys and focus groups
revealed that, based on the existing conditions of micro entrepreneurs, the majority of whom
have been categorized as productive poor, economic literacy would not be a necessary
component of financial capability. People in general set little emphasis on economic literacy, and
therefore economic education seem to have little influence. Considering that economic literacy
can be seen less essential for individuals with little resources, does this suggest that economic
literacy instruction should be reserved for the rich and powerful? This is comparable with a
utilitarian perspective that evaluates only the actual costs and rewards (Akyuz, 2018).
From the individuals' perspective, a utilitarian view may also result in a similar result
that individuals who do not understand the value of economic literacy training may be hesitant to
engage. However, if we see economic literacy as a fundamental right to survival, it really should
be offered to everyone regardless of the training courses influence upon them. Additionally, even
if one feels that economic literacy should be reserved for the wealthy, the idea of the upward
financial mobility, i.e. the capacity to really get richer, must be recognized. In the other sense,
economic literacy will become more useful in the long run. If financial education for adults is
ineffective, it might be useful to make it accessible to vulnerable groups at a younger age. Such
descriptive data indicate that economic literacy is rather poor, especially among micro
entrepreneurs who face strategic decisions on a daily basis. Similar results about economic
literacy can be seen in Khawaja, (2018) research, which revealed that a high percent of
individuals in their sample failed economic literacy. This may be explained by the concept of
skill formation, which has been extensively addressed in the finance of human development
(Khokhar, 2018). People develop their abilities beginning in their childhood and adolescence,
and social and environmental variables play a significant impact. Unless they reach a particular
age, the majority of individuals do not encounter financial decision-making, which is thought to
need basic levels of financial literacy. As a result, as most skills need firsthand experience in
childhood (Liu, 2020), developing economic literacy into adulthood may not be desirable. One
could make the argument that those who face lack of adequate formal education and whose
social and environmental conditions during childhood and adolescence prohibit the development
of appropriate economic literacy, they both may acquire it in later life through actual
observations with financial decision making or participation in economic literacy training.
However, presuming they are free to participate in financial education, there should be a
compelling purpose for them to acquire this ability. Park, (2018) developed a conceptual model
that demonstrates that individuals would engage in economic education if they feel the related to
successful the cost. While discussing the cost-benefit analysis of financial education for micro
entrepreneurs is outside the focus of research, but it is an interesting avenue for further empirical
studies.

Another study found that students enrolled in business courses are significantly more certain to
have appropriate economic literacy than non-business students. Male students, on the other hand,
demonstrate less economic literacy skills as compared to female counterparts, as seen by the
findings. Additionally, the findings indicate that children whose parents work have more
sufficient economic literacy understanding than children whose parents do not work. This
suggests that while working parents are more sensitive to economic troubles, their kids are
learning the fundamentals of financial management, making it more likely for them to benefit
from financial troubles. Additionally, past research indicates that individuals whose fathers had
SHS education had a favorable correlation with their general knowledge. Similarly, individuals
with tertiary-level fathers are much more inclined to be informed than individuals without any
formal education. This is also true for students whose mothers are educated and trained. On the
basis of capital town residency, the findings indicate that individuals who live in capital cities are
more likely to possess appropriate general knowledge. However, the findings indicate that
financial conversation has little effect on students' basic knowledge. Previous research indicates
that students enrolled in business courses are more educated than those enrolled in non-business
courses. This verifies Saraswat, (2018) results. Students' grade level is seen as an indicator for
their economic literacy, with the greater their achievement, the more likely they are to be
informed. This phenomena may be explained by the fact that these children may have benefitted
from general financial management courses included in their academic curricula and from
school-sponsored seminars. Additionally, the area in which people found themselves has an
effect on their level of knowledge, for example, living in a capital city enables individuals to
learn about competent financial decisions.

In another study, the t-test findings were used to determine the level of economic literacy.
 Figure 9: t-Test Result
Source: created by author from: Yeh, M.T. (2020). An empirical study on how financial literacy
contributes to preparation for retirement. Journal of pension economics and finance, pp. 1-3.
According to the findings of figure 9, economic literacy has a partly negative and a considerable
effect on the purchasing of impulsive items online by the Y generation. Limited product
knowledge has a favorable and substantial effect on the Y generation's online impulse purchase
behavior. Psychological considerations have a favorable and large influence on the Y
generation's online purchasing of Impulsive items. According to the study findings, it is advised
that impulsive purchases be avoided or minimized by students who have a better understanding
of how to manage their own money. This may be achieved by clarifying any demands and
budget before selecting to purchase the goods. Students are motivated by a variety of factors,
including their surroundings and classmates, but also by the appearance and accuracy of an
online product's material, which indicates that the internet product is suitably trained (Liu, 2020).

Another study discovered that the model initially offered had insufficient fit indices. As a
consequence, the method of ignoring non-significant relations and including correlations
among variables with theoretical significance was chosen. Except for TLI and NFI, which were
only slightly acceptable, the final model that provided enough adjustments. Thus, Figure 10
represents the final integrated model together with its standardized coefficients and relationship
significances that is given below;
 Figure 10: Impulsive buying, economic literacy Model
Source: created by author from: Potrich, A.C.G. & Vieira, K.M. (2018). Demystifying financial
literacy: a behavioral perspective analysis. Management Research Review, 41(9), pp. 1047-1068.
Economic literacy, also known as financial literacy, has emerged as a critical component of an
individual person and the market's financial and economic health. However, research indicates
that economic literacy is a complicated phenomenon that may influence other behavioral
variables. Thus, several studies aims to determine a model capable of identifying the combined
influence of economic literacy on materialism, impulsive purchasing, and proclivity to
indebtedness through the use of the construction and testing of a research model. Even amongst
the validated hypotheses, the influence of economic literacy on compulsive purchasing behavior
was the highest significant link, indicating that economic literacy benefits people by improving
their compulsive purchasing habits. Additionally, it was shown that the indirect effect of
economic literacy on tendency to accumulate debt is stronger when just compulsive purchasing
behavior is included in this connection (Yeboah, 2017). Finally, when considering the collective
effect of economic literacy on the behaviors evaluated, it was discovered that the greatest
influence was on compulsive purchasing, followed by inclination for indebtedness and
materialism. Such findings are crucial for the success of public policies and other representatives
interested in this issue, because economic literacy affects more than just the financial health of
someone who has it, and that can help the few who struggle from other psychosocial behaviors,
such as compulsive buying.

Additionally, it may assist in the creation of treatment for those who exhibit materialistic
tendencies, are obsessive consumers, or have a high tendency for debt. Financial companies may
potentially be able to utilize this data to get a better understanding of their consumers' economic
literacy and maintain products that would set to each product description. Furthermore, several
studies show that expanding and consolidating a local financial education approach that might
improve an individual's financial management and also successfully reduce impulsive purchasing
patterns and susceptibility to indebtedness (Park, 2018).

According to another research, as predicted and as illustrated in Figure 11, that adoption of

financial innovations considerably increases use of popular methods of basic financial
institutions. While economic literacy was found to have significant moderating effects on the
intentional relationship between self-control and financial integration, and while adoption of
developments has been illustrated to act as a mediator in other investment areas of study such as
business management, and little consideration has been devoted to this in other subfields
including the corporate finance.

Figure 11: Conceptual framework of financial literacy

Source: created by author from: Byegon, G. (2020). Linkage between Self-Control, Financial
Innovations and Financial Inclusion. A Moderated Mediation Analysis across Levels of Financial
Literacy (The case of owners of Microenterprise in Kenya). Journal of Business and
Management, 5(4).
The framework outlined above is one of few that have experimentally evaluated the moderating
effects of financial technology adoption on the connection between self-control and revenue
growth. While research on the regulating influence of economic literacy continues to be of
relevance in the finance profession, it is the new approach under which the positive indirect
effects of economic literacy were experimentally proven in these findings that makes a
significant addition to the fields of finance. The considerable positive indirect regulated filtered
based observation indicate the need for more research to further theory development in this
emerging area, with a particular emphasis on users of various types of basic financial institutions.
As evidenced by the findings of this and previous research in the area, economic theory plays a
critical role in recognizing the effects of social and psychological factors in influencing financial
decisions. As a result, formal financial institutions should offer the ideas, the recognition they
crave and implement them into their strategy and in advertising firm methods (Bianco, 2011).

Additionally, the study's findings suggest that finance specialists and researchers that should
priorities financial innovations and economic literacy in their efforts to explain and influence the
formation of policy for increased financial inclusion. Research need to go beyond determining
the direct impact of financial inclusion variables and rather than focus on the interactions of
factors acting as mediators or regulators to have a good understanding of the basic links. It'll also
contribute significantly to the efficient usage of formal financial services for socioeconomic and
financial well-being, and therefore to the realization of the United Nations' Sustainable
Development Goals until 2030 (Donnelly, 2016).

Our findings emphasize the importance of centered economic literacy knowledge when dealing
with money and are also consistent with previous studies that illustrated the beneficial role of
financial education in financial planning behavior and that economically handling materials are
more likely to behave financially responsibly. As a result, even if individuals have a high level of
future awareness, our result will suggests that they still need the necessary information to make
strong financial decisions.

1.7. Obstacles for Economic Literacy

Numerous limitations may have a negative effect on Impulsive Buying as a measure of

Economic Literacy. These are listed below;

 Materialism

Materialism is a key contributor to the susceptibility to debt. Individuals with a greater degree of
materialism have such a positive association with attraction to indebtedness, i.e., the greater the
level of materialism of consuming, the greater the proportion of propensity to indebtedness.
Consumers that are quite materialistic are now more prone to be irresponsible and overspend.
Economic education is said to impact the reduction of materialism since it teaches numerous
methods for managing funds properly and obtaining success in the future. Economic literacy
entails Individuals are expected to be able to build as accurate financial budgets for their
tomorrow as feasible, which indicates that a strong understanding of economic literacy will now
have a detrimental influence on materialism (Fernandes, 2014).
  Life Style

Previous study found that students' consumptive behavior was favorably and strongly impacted
by their life style, thus when they had a good and encouraging life style, their consumptive
behavior enhanced. It suggested that a high standard of living boosted consumption and
decreased the value of economic literacy. The discovery is compatible with MacDonald's theory
(2010). A life style that has happened in culture is a life style that perceives a specific item as
something that may bring better lifestyle. Such a way of living may result in consumptives.
Living style affected consumption behavior, and economic literacy was shown by a reduced life
style owing to the students' self-control. It is consistent with Harnish, (2018) thesis, which states
that lifestyle influences consumption behavior. It has an impact on needs, interests, and
behaviors, including purchasing habits. He also remarked that one's lifestyle might be an
incentive and guide in purchasing anything.

 Problematic Internet Shopping

In terms of Online Shopping risks features, a French study of both the qualities of Questionable
Internet Shoppers among Parisian university students found, that they were more likely to
support to purchase online due to the extensive offers and instant good feeling, and also
expressing a willing to invest time and money at online shopping. It may be claimed that there
are a few variations between these activities in terms of certain cognitive characteristics of a
customer, such as looking for an item, preparing for a buy, and awaiting a delivery, as well as the
influence on consumers' economic, social, and family lives (Kasser, 2018). Nevertheless, from a
consumption perspective, the multiple variants of buy, being online and offline, would also
provide separate retail experience. For example, connectivity to the good or service with aspects
of a system might provide the buyer with instant gratification, but while online shoppers can only
admire an increased intracellular and the satisfaction that comes only with procession of the good
or service. Young people have enormous purchasing power, predicted to be $150 billion per year
in 2010. Our youngsters are becoming a captive audience and simple victims due to the growing
usage of online shopping and gaming, relentless credit card telemarketing, and electronic
hacking schemes (Klonz, 2011).

 Social Demographic
Demographic parameters such as age, family size, family status, gender, earnings, employment,
profession, religion, cultural race, ethnicity, and social class are all related as barriers to
economic literacy for impulsive purchase (Kuknor, 2017). The demographic component is so
important with marketers is that it is frequently intimately connected to the demands and
ambitions of customers. Limbu, (2017) found a correlation between demographic parameters
such as age, gendered type, money, education, and marital status and economic literacy.
Everyone with a strong propensity for consumption is often a single or married lady with a
greater income and education. This demonstrates that the more the social demographic variable's
value, the greater the amount of consumptive behavior.

 Consumer Environment

Consumer Environments result in parents' duty of educating and influencing their child's
consumer behavior in a good manner. In other terms, parents must educate their children about
correct consumer behavior. Education, family, friends, and professions, as well as gender, self-
control, and the surroundings, all have a significant part in shaping, guiding, changing, and
developing one's consumers' views and behavior (Mathai, 2016). Economic behaviors must be
taught to youngsters since it is one of the tools of economic situation (Paul, 2017). The elderly's
lifestyle or education has been shown to an effect and influence on their children's economic
literacy, and the parents' lifestyle and socializing have a big and substantial influence on their
kid's future behaviors. Children's consumer behavior is often irrational, and thus frequently
results lead towards the bad consequences. Parents have an essential importance in establishing,
directing, and leading their children's economic literacy behavior.

The previous sections attempt to elaborate on the concept of Economic Literacy as a means of
avoiding impulsive purchases. Additionally, the nature of Economic Literacy has been explained,
as well as by the use of several models. Economic literacy is used to represent elements of the
theoretical concept of innovative behavior, determination, and risk-taking as contributing factors
for Impulsive buying. Economic Literacy and Impulsive Buying have also been addressed. The
evaluation of opportunities has been explored as a method for initiating the Economic Literacy
process and generating the Economic Literacy result Impulsive Buying. Finally, many
difficulties and obstacles of economic literacy have been examined. The next chapter examines
prior experience in order to construct context in reality.