We analyze whether the frequent use of credit lines is rational or influenced by behavioral traits of households. We consider the special case of Germany where credit lines on current accounts are available to 80% of the population. We document that the excessive usage of costly credit lines is...

Financial literacy is essential for making key financial decisions related to saving, borrowing and investment. Although numerable studies have been conducted to find elements of financial literacy, most of them focus on developed countries. This study aims to determine characteristics that...

The financial technology (fintech) sector is revolutionizing traditional financial practices, yet little information exists on the users of these services. In this study, we examine untapped information from the 2015 National Financial Capability Study and the 2016 GFLEC Mobile Payment Survey to...

I examine the financial fragility of German households during the second wave of COVID-19 infections in the winter of 2020/21 by analyzing the households’ ability to come up with EUR 2,000 within one month. About one in three households reports being unable to cover an unexpected expense of...

Household investment mistakes are an important concern for researchers and policymakers alike; portfolio underdiversification ranks among those mistakes that are potentially most costly. However, its roots and empirical importance are poorly understood. I estimate quantitatively meaningful...

Economic theory suggests that households should invest their financial wealth in a combination of cash and a well-diversified equity portfolio. Yet, many households' equity investments are strongly concentrated in a few assets. Attempts to explain this discrepancy have included low levels of...

I survey the advice given by the fifty most popular personal finance books and compare it to the prescriptions of normative academic economic models. Popular advice frequently departs from normative principles derived from economic theory, which should motivate new hypotheses about why...

This study aims to determine the factors that affect financial literacy in Japan using data from Osaka University's Preference Parameter Study in Japan. We examined fourteen variables covering respondents' demographic, socio-economic, and psychological backgrounds drawn from social learning,...