| Abstract: |
This research employs data from Japan to study the relationship between the
experience of financial education and the participation of Japanese persons on
financial markets. We account for unobserved heterogeneity by employing a
three-class Finite Mixture Model. The prior probability of class membership is
a function of sociodemographic characteristics of the person. We examine the
association between the investment experience probability conditional on class
membership, and the experience of financial education at home, school and the
workplace, controlling for a financial literacy score measured through Item
Response Theory, and several behavioral traits. The results allow us to
extract a segment of striving persons whose investment behavior differs in
important ways from other groups. Education at school or work is significantly
associated with higher investment probabilities across all classes of
individuals. The impact of financial education at home is more heterogeneous,
and may be negative for the most fragile groups. We believe that our results
may offer important insights for policy-makers involved in the design of
financial education programs. |