Financial literacy is increasingly recognized as a crucial factor for individual and societal well-being. This study investigates the determinants of financial literacy within a unique financial and economic context, focusing on civil servants in Maichew Town, Tigray. A mixed-methods approach was employed, combining quantitative and qualitative data collected through a self-administered questionnaire distributed to a random sample of 271 civil servants. The study employed a binary logistic regression model to examine the relationship between financial literacy, measured as a binary outcome, and a range of socio-demographic and economic variables. These variables included age, gender, income level, work experience, marital status, field of study, access to financial news, and the number of dependents in the household. The findings reveal that gender, field of study, access to financial news, and the presence of dependents significantly influence the financial literacy levels of the respondents. Notably, female civil servants, those with a background in fields related to finance and economics, individuals with access to financial news, and those with dependents demonstrated higher levels of financial literacy. Conversely, age, work experience, marital status, education level, and income level did not exhibit a statistically significant relationship with financial literacy. This study contributes valuable insights into the factors shaping financial literacy among civil servants in a specific Ethiopian context. The findings underscore the importance of targeted interventions and financial education programs that address the unique needs of different demographic groups, particularly women and those in professions not directly related to finance. By enhancing financial literacy, policymakers and educators can empower individuals to make informed financial decisions, ultimately fostering greater economic stability and well-being.
Published in | International Journal of Accounting, Finance and Risk Management (Volume 9, Issue 2) |
DOI | 10.11648/j.ijafrm.20240902.12 |
Page(s) | 55-68 |
Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
Copyright |
Copyright © The Author(s), 2024. Published by Science Publishing Group |
Financial Literacy, Determinants, Logistic Analysis, Civil Servants, Maichew, Tigray
Type of Variable | Description of the variable |
---|---|
Dependent | |
Financial literacy | Dummy variable that takes 1 if the respondent scored more than three on the financial literacy test and 0 otherwise. |
Independent Variables | |
Age | Continuous expressed in terms of the years since the birth of the respondent. |
Sex | Dummy that takes 1 if female and 0 otherwise. |
Marital status | Nominal that takes the values 1 if single and 0 if conjugal. |
Dependents | A dummy variable that takes the value 1 if the respondent has economically dependents upon him and 0 otherwise. |
Work experience | Continuous expressed in terms of number of years the respondent has been in service. |
Education level | Interval in nature that takes the value of 1 for diploma & below, 2 for BA degree, and 3 for Masters and above. |
Field of study | Nominal that takes the value of 1 for Business and Economics and 0 otherwise. |
Access to financial news | It is a dummy variable that takes the value 1 if the respondent has access to financial news and 0 otherwise. |
Income | A continuous variable that takes the value of the natural logarithm of respondent’s monthly salary. |
Variable | Categories | Frequency | % |
---|---|---|---|
Gender | Male | 169 | 62.36 |
Female | 102 | 37.64 | |
Education level | Diploma & below | 93 | 34.32 |
Bachelors | 168 | 61.99 | |
Masters & above | 10 | 3.69 | |
Marital status | Single | 117 | 43.17 |
Conjugal | 154 | 56.83 | |
Field of study | Business & economics | 81 | 29.89 |
Non-Business & economics | 190 | 70.11 | |
Access to financial news | Have access | 140 | 51.66 |
Have no access | 131 | 48.34 | |
Have dependents | Yes | 158 | 58.30 |
No | 113 | 41.70 | |
FL level | High | 74 | 27.31 |
Low | 197 | 72.69 |
Variable | Obs | Mean | Std. dev | Min | Max |
---|---|---|---|---|---|
Age | 271 | 30.15 | 5.52 | 20 | 50 |
Income | 271 | 4236.33 | 1505.66 | 1137 | 9525 |
Work experience in years | 271 | 5.158672 | 3.856777 | 1 | 20 |
Financial literacy | Coef. | Std. Err. | Z | P>|z| | [95% Conf. Interval] | |
---|---|---|---|---|---|---|
_hat | .8944386 | .1769845 | 5.05 | 0.000 | .5475553 | 1.241322 |
_hatsq | -.0753642 | .0890605 | -0.85 | 0.397 | -.2499197 | .0991912 |
_cons | .0705725 | .2033812 | 0.35 | 0.729 | -.3280473 | .4691923 |
Numbers of observations | Number of groups | Hosmer-Lemeshow chi2 | Prob > chi2 |
---|---|---|---|
271 | 10 | 10.72 | 0.2180 |
Number of obs = 271 LR chi2(10) = 87.69 Prob > chi2 = 0.0000 Log likelihood = -115.03555 Pseudo R2 = 0.2760 | ||||||
---|---|---|---|---|---|---|
FL | Odds Ratio | Std. Err | Z | p>z | [95% Conf. Interval] | |
Gender | 0.131913*** | 0.0576442 | -4.64 | 0.000 | 0.0560175 | 0.3106357 |
Age | 1.039439 | 0.0519062 | 0.77 | 0.439 | 0.9425251 | 1.146319 |
Income | 2.936742 | 3.813254 | 0.83 | 0.407 | 0.2304683 | 37.42144 |
Education | 1.304947 | 0.4918382 | 0.71 | 0.480 | 0.6234083 | 2.731575 |
Education | 0.1254632 | 0.167931 | -1.55 | 0.121 | 0.0091032 | 1.729175 |
Work experience | 0.9152105 | 0.0637147 | -1.27 | 0.203 | 0.798477 | 1.04901 |
Marital status | 1.139683 | 0.3969117 | 0.38 | 0.707 | 0.5758907 | 2.255422 |
Fnews | 4.349327*** | 1.54658 | 4.13 | 0.000 | 2.166421 | 8.73175 |
Field of study | 3.06365*** | 1.057331 | 3.24 | 0.001 | 1.557655 | 6.025692 |
Dep | 0.2845267*** | 0.0954807 | -3.75 | 0.000 | 0.1473937 | 0.5492462 |
Constant | 0.003015 | 0.0136999 | -1.28 | 0.201 | 4.09e-07 | 22.23446 |
Note: Variables marked *** are significant at the 0.01 level of significance. There are no significant variables at the other standard levels of significance. |
OECD | Organization for Economic Cooperation & Development |
CSA | Central Statistical Agency of Ethiopia (CSA) |
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APA Style
Adhana, H. N. (2024). Logistic Analysis on Financial Literacy and Its Determinants: An Empirical Evidence from Maichew Town of Tigray, Ethiopia. International Journal of Accounting, Finance and Risk Management, 9(2), 55-68. https://doi.org/10.11648/j.ijafrm.20240902.12
ACS Style
Adhana, H. N. Logistic Analysis on Financial Literacy and Its Determinants: An Empirical Evidence from Maichew Town of Tigray, Ethiopia. Int. J. Account. Finance Risk Manag. 2024, 9(2), 55-68. doi: 10.11648/j.ijafrm.20240902.12
@article{10.11648/j.ijafrm.20240902.12, author = {Hailekiros Nigus Adhana}, title = {Logistic Analysis on Financial Literacy and Its Determinants: An Empirical Evidence from Maichew Town of Tigray, Ethiopia }, journal = {International Journal of Accounting, Finance and Risk Management}, volume = {9}, number = {2}, pages = {55-68}, doi = {10.11648/j.ijafrm.20240902.12}, url = {https://doi.org/10.11648/j.ijafrm.20240902.12}, eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijafrm.20240902.12}, abstract = {Financial literacy is increasingly recognized as a crucial factor for individual and societal well-being. This study investigates the determinants of financial literacy within a unique financial and economic context, focusing on civil servants in Maichew Town, Tigray. A mixed-methods approach was employed, combining quantitative and qualitative data collected through a self-administered questionnaire distributed to a random sample of 271 civil servants. The study employed a binary logistic regression model to examine the relationship between financial literacy, measured as a binary outcome, and a range of socio-demographic and economic variables. These variables included age, gender, income level, work experience, marital status, field of study, access to financial news, and the number of dependents in the household. The findings reveal that gender, field of study, access to financial news, and the presence of dependents significantly influence the financial literacy levels of the respondents. Notably, female civil servants, those with a background in fields related to finance and economics, individuals with access to financial news, and those with dependents demonstrated higher levels of financial literacy. Conversely, age, work experience, marital status, education level, and income level did not exhibit a statistically significant relationship with financial literacy. This study contributes valuable insights into the factors shaping financial literacy among civil servants in a specific Ethiopian context. The findings underscore the importance of targeted interventions and financial education programs that address the unique needs of different demographic groups, particularly women and those in professions not directly related to finance. By enhancing financial literacy, policymakers and educators can empower individuals to make informed financial decisions, ultimately fostering greater economic stability and well-being. }, year = {2024} }
TY - JOUR T1 - Logistic Analysis on Financial Literacy and Its Determinants: An Empirical Evidence from Maichew Town of Tigray, Ethiopia AU - Hailekiros Nigus Adhana Y1 - 2024/08/27 PY - 2024 N1 - https://doi.org/10.11648/j.ijafrm.20240902.12 DO - 10.11648/j.ijafrm.20240902.12 T2 - International Journal of Accounting, Finance and Risk Management JF - International Journal of Accounting, Finance and Risk Management JO - International Journal of Accounting, Finance and Risk Management SP - 55 EP - 68 PB - Science Publishing Group SN - 2578-9376 UR - https://doi.org/10.11648/j.ijafrm.20240902.12 AB - Financial literacy is increasingly recognized as a crucial factor for individual and societal well-being. This study investigates the determinants of financial literacy within a unique financial and economic context, focusing on civil servants in Maichew Town, Tigray. A mixed-methods approach was employed, combining quantitative and qualitative data collected through a self-administered questionnaire distributed to a random sample of 271 civil servants. The study employed a binary logistic regression model to examine the relationship between financial literacy, measured as a binary outcome, and a range of socio-demographic and economic variables. These variables included age, gender, income level, work experience, marital status, field of study, access to financial news, and the number of dependents in the household. The findings reveal that gender, field of study, access to financial news, and the presence of dependents significantly influence the financial literacy levels of the respondents. Notably, female civil servants, those with a background in fields related to finance and economics, individuals with access to financial news, and those with dependents demonstrated higher levels of financial literacy. Conversely, age, work experience, marital status, education level, and income level did not exhibit a statistically significant relationship with financial literacy. This study contributes valuable insights into the factors shaping financial literacy among civil servants in a specific Ethiopian context. The findings underscore the importance of targeted interventions and financial education programs that address the unique needs of different demographic groups, particularly women and those in professions not directly related to finance. By enhancing financial literacy, policymakers and educators can empower individuals to make informed financial decisions, ultimately fostering greater economic stability and well-being. VL - 9 IS - 2 ER -