ArticlePDF Available

Abstract and Figures

Financial crises put stress on the society of the country of our investigation, whose financial vulnerability is raising from high indebtedness, a history of defaulted loans, and an insufficient level of financial literacy. In this context, financial awareness has been recognised as a means for decreasing households' exposure to financial difficulties, bridging crisis periods with the substantial precautionary holding of liquid assets, and improving their well-being over longer periods of time. Raising financial awareness is a crucial policy aim, and has been investigated in this study as well. A questionnaire survey was completed by Hungarian university students across different majors, to assess the financial literacy level of the responders from their own perspective. In addition to this, we have investigated their e-banking habits. According to our findings, different student groups (clusters) have been identified by means of Ward analysis (where the significance of clusters were tested by ANOVA). Our results confirm that across all clusters the university students place their trust in non-governmental organisations and central bank foundations rather than those of the financial institutions in evolving financial literacy. This outcome of our study may provide an argument for designing policy incentives for raising financial awareness in an institutionalised way, relying on the role of the privately funded NGOs and on the central bank. JEL Classification: D14, D91, I25
Content may be subject to copyright.
27
Judit Sági, László Vasa,
Csaba Lentner
ISSN 2071-789X
RECENT ISSUES IN ECONOMIC DEVELOPMENT
Economics & Sociology, Vol. 13, No. 3, 2020
INNOVATIVE SOLUTIONS IN THE
DEVELOPMENT OF HOUSEHOLDS’
FINANCIAL AWARENESS: A
HUNGARIAN EXAMPLE
Judit Sági
Budapest Business School
University of Applied Sciences,
Budapest, Hungary
E-mail: sagi.judit@uni-bge.hu
ORCID 0000-0003-4197-3530
László Vasa
Széchenyi István University,
Győr, Hungary
E-mail: laszlo.vasa@ifat.hu
ORCID 0000-0002-3805-0244
Correspondent Author
Csaba Lentner
National University of Public
Service, Budapest, Hungary
E-mail: Lentner.Csaba@uni-
nke.hu
ORCID 0000-0003-2241-782X
Received: February, 2020
1st Revision: May, 2020
Accepted: September, 2020
DOI: 10.14254/2071-
789X.2020/13-3/2
ABSTRACT. Financial crises put stress on the society of the
country of our investigation, whose financial vulnerability is
raising from high indebtedness, a history of defaulted loans,
and an insufficient level of financial literacy. In this context,
financial awareness has been recognised as a means for
decreasing households’ exposure to financial difficulties,
bridging crisis periods with the substantial precautionary
holding of liquid assets, and improving their well-being over
longer periods of time. Raising financial awareness is a
crucial policy aim, and has been investigated in this study as
well. A questionnaire survey was completed by Hungarian
university students across different majors, to assess the
financial literacy level of the responders from their own
perspective. In addition to this, we have investigated their
e-banking habits. According to our findings, different
student groups (clusters) have been identified by means of
Ward analysis (where the significance of clusters were tested
by ANOVA). Our results confirm that across all clusters the
university students place their trust in non-governmental
organisations and central bank foundations rather than
those of the financial institutions in evolving financial
literacy. This outcome of our study may provide an
argument for designing policy incentives for raising
financial awareness in an institutionalised way, relying on
the role of the privately funded NGOs and on the central
bank.
JEL Classification
: D14,
D91, I25
Keywords
: financial literacy, non-governmental organisations, young
adults, Hungary, questionnaire survey.
Sági, J., Vasa, L., & Lentner, Cs. (2020). Innovative solutions in the development
of households’ financial awareness: A Hungarian example. Economics and Sociology,
13(3), 27-45. doi:10.14254/2071-789X.2020/13-3/2
28
Judit Sági, László Vasa,
Csaba Lentner
ISSN 2071-789X
RECENT ISSUES IN ECONOMIC DEVELOPMENT
Economics & Sociology, Vol. 13, No. 3, 2020
Introduction
In the financial stability of a national economy, in addition to the macroeconomic
provisions(the budget balance and the external balance), increasing significance has been
always assigned to the financial balance of households, one of the primary income holders,
based on employees’ incomes from work and social benefits. The subprime crisis that started
in the spring of 2007 on the Anglo-Saxon mortgage markets was primarily due to household
overlending, and due to banks’ normative behaviour in the lending market, it soon spread
globally. As an inevitable concomitant, the amount of defaulted loans rocketed (Agarwal et al.,
2014; Dahlstrom, 2014). Although the expansion of budget sectors and central banks solved the
liquidity and capitalisation-related problems of commercial banks struggling with problematic
loan portfolios, banks practising more prudent lending and households using credits more
consciously are considered as longer-term stabilising factors (Lentner et al., 2015). In
facilitating the latter, the beneficial impacts of improvement by the government and by civil
society organisations, especially in the field of financial awareness, are indispensable. This
study analyses the conditions in Hungary, as an entity that spent decades in a socialist-type
planned economy regime. Market reforms in Hungary were launched at the end of the 1980s,
adjusting ownership relations and institutional system in the country, and more specifically, its
central and commercial banking system to the market standards of Europe. However, similar to
other post-socialist countries that have already switched to market relations, to this very day
Hungary has been afflicted by the consequences of the past and faces numerous difficulties in
its social positions, including households’ financial management, financial awareness, and
quality of finance (Dobák & Sági, 2005). As a result, social positions are more vulnerable than
those of highly developed market economies, and consequently, would require a more
pronounced involvement of the government and, especially, civil society organisations
(Spolaore & Wacziarg, 2013; Rikmann & Keedus, 2012).
This study surveys the financial conduct and awareness among the university students
between 18 and 31 y.o. (the “emerging” generation just before starting a family) in a breakdown
by gender, educational profile, regional distribution and the regional development differences.
Marcolin and Abraham (2006) suggested including the field of study when examining financial
literacy among the university students, therefore, we have decided to extend our research to
different majors. Our findings fill a literature gap because the survey on university students’
financial literacy, broken down into economic, technical and other majors, is combined with
their financial conduct in practice. Conclusions of our survey shed light on certain problems of
the post-socialist territories. What lends special relevance to this study is the fact that despite
three decades of successful transition to a market economy, the level of development and wages
in the Central and Eastern European Region, including Hungary, remain approximately 75 per
cent behind the average of the core Member States of the European Union and nearly 50 per
cent behind the average pay rates in the United States of America (according to the Eurostat
and the U.S. Bureau of Labor Statistics, estimated hourly labour costs). Still, households’
consumer attitudes, especially their propensity to purchase and the extent of purchases, have
been adjusted to developed market economies for several decades. Consequently, it had to be
supplemented due to dependence on the credit facilities offered by the commercial banks active
in the region, as well as the fact that both the disposable labour income and the welfare benefits
aimed at closing gaps remain below the level of consumption. Furthermore, the propensity to
purchase is considerably higher than that in Western Europe or in North America due to the
slow increase in incomes, weak accumulation capacity and the consequent postponement of
purchases. If, however, this is not accompanied by a responsible attitude in family finances, the
banking sector in the region, and especially its society, may suffer considerable damage and
29
Judit Sági, László Vasa,
Csaba Lentner
ISSN 2071-789X
RECENT ISSUES IN ECONOMIC DEVELOPMENT
Economics & Sociology, Vol. 13, No. 3, 2020
even social conflicts (Falk et al., 2018). Amidst the ongoing pandemic situation, many
households experience a sharp decline in their regular (wage) incomes, which, in the absence
of a considerable amount of savings, may threaten their living conditions. In Hungary, in the
2nd quarter of 2020 GDP declined by 13.6% as compared to the corresponding period of the
previous year, with a negative impact on the performance of most sectors of the economy. This
drop is even worse than the 3rd quarter of 2008, when there was a 7.5 per cent fall (Hungarian
Central Statistical Office data). Our hypothesis is that the activities undertaken by organisations
established by the civil society, by commercial banking institutions or by central banks to
improve financial literacy, which constitute the subject-matter of this analysis, are of pivotal
significance in today’s context.
The structure of the study is as follows. First, the significance of financial awareness is
explained, from the economic policy perspective and in light of the OECD-INFE
recommendations. Then, in the Data and Methods section, details about the survey
questionnaire are presented (the survey has been conducted on a sample of university students,
representing 86.2% of the total students’ population in Hungary). The data analysis gives
grounding for the clusters whose characteristics are described in the Results section. Following
this, institutional solutions for improving financial literacy are discussed, along with the
conclusions concerning the role of non-governmental and non-profit organisations. Finally,
Summary completes the study.
1. Literature review
The economic policy actions taken to improve financial awareness are, in fact,
reasonable responses to the increase in risks as a result of the complexity of the financial
environment (Bateman et al., 2011, Dhandayuthapani & Vinothkumar, 2020). In this context,
this paper focuses on the policy mix elements that are the most suitable for supporting
consumers’ responsible financial decisions and for the prevention of their excessive
indebtedness. The factors contributing to their modes of action include the extent of
premeditation or impulsiveness in household saving and borrowing decisions, the likelihood of
making the wrong decisions and the predictability of wrong decisions (Croy et al., 2010;
Courchane & Zorn, 2008). Financial literacy is improved within the framework of central
banks’ monetary policies and through commercial banks’ lending practices, and its practical
implementation falls within the scope of the corporate social responsibility of central banks and
commercial banks. As a result of the crisis, increasingly responsible and conscious banking
policies are gaining ground both in the central and commercial banking systems, enhancing
their social sensitivity and, in the event of procedures vis-a-vis bank customers, increasing the
responsibility assumed (Lentner et al., 2015). However, it is important that civil-society
organisations, i.e. those independent of the banking sector, should have a major role in
mitigating citizens’ feeling that the efforts made for the improvement of financial literacy
constitute a top-down or institutional pressure and thereby increase their acceptance by the
population. However, in Hungary, a country that has taken a particular trajectory in economic
and social development, civil society organisations, completely independent of public
institutions and commercial banks, are still in their infancy.
The OECD International Network on Financial Education (OECD-INFE, 2016)
regularly publishes data concerning the findings of its survey conducted once every three years
in 30 countries. This serves to assess the financial literacy and financial inclusiveness of the
respondent households with the use of a questionnaire. Based on the findings of the 2015
international survey, the OECD formulated a finance policy recommendation for a combination
of the regulatory and consumer protection framework with financial education to improve
30
Judit Sági, László Vasa,
Csaba Lentner
ISSN 2071-789X
RECENT ISSUES IN ECONOMIC DEVELOPMENT
Economics & Sociology, Vol. 13, No. 3, 2020
households’ financial resilience to financial shocks. Linking financial regulation with the
consumer protection framework may prevent households from taking excessive amounts of
loans and thus getting into a debt trap due to late repayments (Guerrieri & Lorenzoni, 2017).
Deterioration in households’ financial position can frequently be fended off by simply choosing
financial products that correspond to their actual income situation (Calcagno & Monticone,
2015). Independent financial and investment consultancy services supported by the regulatory
environment may help households in achieving their long-term goals even in the current
environment of altering interest rates (OECD-INFE, 2018; Hansen 2012).
According to the definition published by OECD-INFE, financial literacy is ‘a
combination of awareness, knowledge, skill, attitude and behaviour necessary to make sound
financial decisions and ultimately achieve individual financial wellbeing’ (OECD-INFE, 2018,
p. 4). This expression refers to a person’s skills relating to finances and investments (Fernandes
et al., 2014), as a form of personalised capabilities (Remund, 2010), and their behaviour reflects
a person’s financial awareness (Potrich et al., 2016). A survey of the level of financial literacy
may set the direction for the elaboration and development of a system of financial education
and consumer protection (Kempson, 2009) as well as recommendations on the development of
financial competences via appropriate improvements of learning process (Berková &
Krpálek, 2017).
Society has three expectations of financial education: to hand down up-to-date
information on financial investments and assets as well as banking and investment products; to
shed light on fundamental financial correlations (such as the time value of money, and the
advances of portfolio diversification etc.); and to provide a glimpse into the procedure of
planning, implementing and evaluating financial decisions (Hogarth, 2006; Haynes-Bordas et
al., 2008). It expected to accomplish the above to improve, or at least to prevent further
deterioration in the standard of living and welfare for the individuals living in the given society
(Mitchell & Lusardi 2015; Atkinson & Messy, 2012), with prospects for the elderly as well.
Financial literacy provides individuals with abilities to improve their financial wellbeing
through their daily decisions (Quach, 2016). Within this scope, decisions relating to regular
savings (Lusardi et al., 2010; Lusardi & Tufano, 2015) may contribute to smoothing
fluctuations in revenues and expenditures and improve the predictability of incomes and
expenses (Galperti, 2017). If coupled with profitable investment decisions, household
budgeting may contribute to increasing private assets (Ameriks et al., 2003), thus self-
awareness may lead to wealth accumulation (Bazley et al., 2020). When a household plans the
use of its financial savings, it sets expenditure targets, outlines alternative methods for
achieving them, and takes account of limiting factors and the impacts of other conditions on the
outcome (Lynch et al., 2010). In the course of planning their assets for the long term, households
with high financial literacy consider the various alternative possibilities of investment, such as
the purchase and holding of stock-exchange traded investment securities or pre-retirement
savings (Van Rooij et al., 2011; Clark et al., 2006).
Policy issues related to the improvement of financial awareness may ask for the active
role of non-governmental organisations (NGOs). The involvement of civil society organisations
is based on a survey of the measurability of the (added) social value they create, which places
financial literacy in a social context (Kato et al., 2018, Maas & Liket, 2011, Maier et al., 2015).
Arising from their function, civil society organisations can have a proactive role in expanding
individual (in this case: student) skills, in converting the acquired knowledge into values, and
in facilitating the birth of functional outcomes from theoretical knowledge (Robeyns, 2006).
Also, they can moderate the hazards posed by risky financial decisions made as a result of
insufficient financial literacy to the given individual’s quality of life and, indirectly, to society
(Sen, 2004, Walker, 2005 and Qizilbash, 2002). Last but not least, civil society organisations
31
Judit Sági, László Vasa,
Csaba Lentner
ISSN 2071-789X
RECENT ISSUES IN ECONOMIC DEVELOPMENT
Economics & Sociology, Vol. 13, No. 3, 2020
may transfer the values arising from corporate social responsibility to young adults in higher
education (Rim et al., 2016), especially considering the fact that financial consciousness and
setting long-term financial goals are less typical among young adults (Németh & Zsótér, 2019).
Due to the late rise of the middle classes, which only started in the second half of the
19th century, and the forty years of a socialist-type planned economy, the presence of civil
society organisations in Hungary disregarding the NGO’s facilitating conflict management
(Stroschein, 2002) is still less perceptible. Moreover, after the change of regime, the restrictive
economic policy actions were taken during the transition to a market economy to the detriment
of society (Lentner, 2020). In particular, the professional scepticism relating to the
sustainability of the decade of consolidation after the crisis (Csaba, 2019), and the concerns
about the sustainability of the operation of Hungarian enterprises, which are potential
philanthropists, (Mihályi & Szelényi, 2019) cast a shadow over the functionality and
strengthening of the private sector and the civil society organisations developing from the latter.
At the same time, it is a fact that the income positions of the national economy and households
improved over the past decade (Matolcsy, 2016), which in turn creates reliable basis for well-
being increase and overall socioeconomic prosperity of the state (Bilan et al., 2020). However,
the country-specific features arising from relatively insufficient development have determined
the frames for civil society organisations up to this date: in this framework, the non-profit
organisations associated with the central bank and with commercial banks predominate, while
there is a chronic deficit in foundations relying on private capital, and thus absolute
philanthropy.
Based on our research, financial literacy can only be significantly shaped over the long
term, if at all (Sági & Lentner, 2019). Cooperation between the civil society organisations of
various backgrounds is indispensable in the sustainable improvement of financial literacy
(Kovács & Terták, 2019). Financial training courses improve the population’s financial skills
in general, but this is not typically the case for lower-income social layers (Kaiser & Menkhoff,
2017). Irrespective of social standing, borrowing and consumer habits are extremely difficult
to influence, especially in light of the fact that they predominantly develop on the basis of
patterns learnt in childhood (McCormick, 2009).
2. Methodological approach
2.1. Data collection
To pick a sample of the younger generation from the Hungarian society of 10 million
people, we administered a questionnaire survey to university and college students. The surveys
were made in Hungary between 2017 and 2018 in the 12 largest campuses, having selected
nearly 16 thousand students. Sample representativeness is shown in the figure of 174,338 full-
time students in the sample (according to 2018 data), representing 86.2 per cent of the total of
202,300 students in Hungary. The survey also represented the young adult population with
higher education qualifications, who according to Paylab salary research platform data for
Hungary may become high-income earners in the future.
The questionnaire was made available for students via internal customised university
platforms. The first section of the questionnaire relates to the respondent’s gender, age,
residential address and housing situation, work experience, and his or her parents’ (foster
parents’) education, to map the demographic characteristics of this population. Next, questions
were asked about their finances (propensity to save, spending habits and financial literacy), and
about their perception of their financial awareness. The results of the respondents’ self-
assessment regarding financial literacy were then compared to their electronic banking habits
32
Judit Sági, László Vasa,
Csaba Lentner
ISSN 2071-789X
RECENT ISSUES IN ECONOMIC DEVELOPMENT
Economics & Sociology, Vol. 13, No. 3, 2020
(i.e. the usage of mobile and internet as a primary channel for banking) to test them (see e.g.
Ackerman & Wolman, 2007, Rai & Sharma, 2019). The questions were worded according to
the OECD methodology (OECD-INFE, 2018), with derogations due to the peculiarities of
student respondents. The list of questions is the following:
- Have you got any savings? (What is the source of your savings? Scholarship, student
work, or financial assistance from your parents?)
- What kinds of cash saving practices do you know from your family?
- Are you familiar with banks’ savings products?
- Have you got a student loan? What chances do you see for repaying your student loan?
How high deadweight effect will it have on you after your graduation?
- Do you currently keep a budget? If you start a family, would you use this opportunity?
Can you see any significance in this during responsible family management?
- Are you familiar with the home financing loans that can be requested for starting a
family? (How familiar are you with the economic nature of loans?)
- How beneficial do you think easy credits are? Have you got a personal loan? Do you
plan to use one later on?
- Are you familiar with the governmental housing subsidy that can be requested in the
framework of the government’s pro-birth policy?
- Have you ever heard of the direct trigger of the global crisis that started in 2007-2008?
Have you ever heard of overlending?
- What do you think of your financial literacy? Do you want to know more about
finances? Whom do you expect to learn such things from?
- Do you consider the non-profit organisations established by commercial banks for
improving financial literacy trustworthy?
- Are you familiar with the foundations established by the National Bank of Hungary
for improving financial literacy and do you consider them trustworthy?
- Have you heard of civil society non-profit organisations established for improving
financial literacy?
- Do you plan to give to charity in the future, and if yes, for what purposes? Do you
think philanthropy improves social welfare? In your opinion, what charitable purposes may
serve as bases for setting up private foundations? Do you think of granting to completely civil
society organisations for the advancement of financial literacy?
- Do you know of any charitable private foundations in your family or among your
friends?
- Do you prefer to donate to private or to institutional foundations supported by
commercial banks?
- Do you know anything about the National Bank of Hungary’s financial literacy
improvement activities and do you consider its awareness-raising performed through
foundations efficient?
- On a scale of 5, rate the activities performed in the interest of social welfare by non-
government organisations aiming at improving financial literacy. On the same scale, how do
your rate civil society organisations working to improve financial literacy but backed by
financial institutions or by the central bank?
Note that the purpose of the research was not to provide a quantitative survey of the
financial awareness of the university students (complete control tests). Numerous research
findings have been published on this matter; see for example Beal & Delpachitra, 2003, Chen
& Volpe, 1998, Shambare & Rugimbana, 2012, Cull & Whitton, 2011. Similarly, the aim was
not to evaluate the educational systems of universities and the efficiency of transferring
financial information (Fox et al., 2005; Hanna et al., 2010; Mandell & Klein, 2009). This is
33
Judit Sági, László Vasa,
Csaba Lentner
ISSN 2071-789X
RECENT ISSUES IN ECONOMIC DEVELOPMENT
Economics & Sociology, Vol. 13, No. 3, 2020
because the improvement in the system of educational institutions would be sufficient in light
of a quantitative survey of financial literacy; however, improvement in financial literacy
requires a different attitude and also different institutional forms (Hastings et al., 2013). Rather,
our research aim was to examine whether there is room for improving financial literacy in
Hungary with the involvement of financial and non-profit organisations targeting the students
in university education.
2.2. Data analysis
The overall picture that emerges from the responses obtained during the questionnaire
survey of Hungarian university students suggests that young adults’ propensity to save (for at
least one year) is low, while they retain a high amount of cash. In our sample, on average 1 out
of 5 responders deposits money on savings accounts. No more than approximately one-third of
them use household budget calculators. The high (28 per cent) ratio of young adults with rapid
credit facilities (personal loans) is a disquieting indication. Our findings are partly explained by
the characteristic feature of Hungarian households that real purchasing power remains constant
against rising propensity to borrow and increasing indebtedness (Huszti, 2018).
Based on their responses, nearly 70 per cent of the interviewed young people had hardly
any understanding of the deeper causes that triggered the 2008 global economic crises, or not
at all, and are not aware of the risks of excessive indebtedness. More than 75 per cent of the
respondents consider the opportunities offered in the family incentives of the current Hungarian
economic policy useful, and in accord with the general credit flow trends in Hungary, this
forecasts indebtedness by young people who are about to start families in the near future. (Note:
After the financial and lending crisis, mainly as a result of fiscal incentives to support families,
starting from 2015, the appetite for loans began to pick up again in Hungary, as the family
housing benefit and support for mortgage loans considerably boosted demand for housing loans,
Sági & Lentner, 2018).
The majority, approx. 82 per cent of the interviewed young adults would like to increase
their practical skills in finances. On a scale of 1 to 5, more than 90 per cent of the respondents
confirmed the necessity of institutions undertaking to improve financial literacy, especially
those financed by the central bank or by non-government organisations. 37.9 per cent of them
consider non-profit organisations backed by the central bank and their efforts at complementing
school educational to improve financial literacy as important or highly important; 78.9 per cent
think that non-government organisations could have a really important role in financial literacy;
and only 9.7 per cent relate improvement in financial literacy clearly to organisations supported
by financial institutions (commercial banks). Of all the non-profit organisations in Hungary,
respondents giving positive answers mentioned the OTP Fáy András Foundation, the
Pénziránytű Alapítvány [Money Compass Foundation] established by the National Bank of
Hungary, the Hungarian Banking Association and the Student Loan Centre, and the MNB’s
Pallas Athene foundations as good examples. Simultaneously, they expressed their opinion that
there are no organisations other than the listed NGO’s, which are supported by financial
institutions or by the central bank, or if there are, then the organisations fully established by the
civil society are invisible, although they would trust them more than commercial banks’
organisations.
The survey also covered the charity aspect of financial literacy, not relating to direct
financial interests. Many kinds of different intentions may underlie charity; however, we
wanted to know whether or not the respondents thought that donation created community value.
The young adults’ responses have confirmed our assumption that they consider charity
exemplary for the society and they themselves know patrons in their immediate families and
34
Judit Sági, László Vasa,
Csaba Lentner
ISSN 2071-789X
RECENT ISSUES IN ECONOMIC DEVELOPMENT
Economics & Sociology, Vol. 13, No. 3, 2020
among their friends. The majority of the respondents think that the foundations in the hands of
rich private persons and non-profit organisations are capable of returning value to the society
for the areas they finance (culture, financial literacy etc.).
3. Conducting research and results
In relation to our hypothesis, a five-level Likert scale was used to measure university
students’ confidence (trust) in NGOs, central bank's non-profit organisations, and financial
institutions' non-profit organisations acting in their role in improving financial literacy. In order
to analyse their attitudes, the responders (nearly sixteen thousand students) were characterised
according to gender, educational field, and working experience, as well as the region’s
development level of the responders’ residence, and their parents’ educational level. In the
questionnaire we detected how the responders evaluated their financial literacy, and that how
predominantly they are using e-banking services (by a similar 1-5 scale). From their responses,
we examined whether certain types of behavioural patterns could be detected via identifying
clusters, using Ward method and ANOVA test.
3.1. Application of Ward’s method (test: ANOVA)
The authors divided the respondent young adult (university student) population into
groups according to the shared features in order to analyse the behavioural patterns, in the
context of demographic backgrounds (gender, residence, and parents’ educational level),
university major, work experience and financial literacy of the individual groups. Using Ward’s
method (Ward 1963) for this purpose, six clusters were identified and set up in a 5-step
agglomeration (Graph 1, Annex 1.).
The variance analysis (ANOVA test) showed significant differences between the
clusters (Table 1). In exploratory data analysis, an ANOVA employs an additive data
decomposition that provide a rationale for clusters. Since it is a form of statistical hypothesis
testing used in the analysis of experimental data, its hypothesis is approved or rejected in case
its test result is statistically significant by given parameters. The null hypothesis is that there is
no difference between the means, the groups are the same for the mean of the target variable
across the whole sample. The null hypothesis shall be rejected below the significance level of
0.05. Concerning our sample, the examined grouping variable has a significant effect on the
dependent variable, i.e. the group averages differ (the null hypothesis has been rejected).
Table 1. ANOVA test
ANOVA
flitscore
Sum of Squares
df
MeanSquare
F
Sig.
5258,323
4
1314,581
937,536
0
21992,974
15685
1,402
27251,297
15689
Source: own from SPSS
35
Judit Sági, László Vasa,
Csaba Lentner
ISSN 2071-789X
RECENT ISSUES IN ECONOMIC DEVELOPMENT
Economics & Sociology, Vol. 13, No. 3, 2020
3.2. Description of the clusters
Based on their characteristic features, the clusters may be described as follows:
1. Ambitions women
Cluster 1 typically includes women (by 80%) who study economics and for the most
part work while studying. Their homes are located in moderately developed or occasionally
underdeveloped regions, and their parents have, for the most part, secondary school or lower
qualifications. Most (nearly 70% of) respondents consider their financial literacy good or
excellent, and this is supported by the fact that a high ratio use electronic banking channels,
considered one of the characteristic features of financial literacy.
2. Men from less well-off backgrounds
Cluster 2 includes nearly three times more men than women, and most of them study
some kind of an economic subject. More detailed questions revealed that although most of them
were not employed, they proactively contributed to their families’ businesses (mostly run out
of necessity). An outstandingly high number of these respondents (1029 out of 1149) live in
underdeveloped regions, and their parents have secondary school qualifications, but no higher.
they almost exclusively rate their own financial literacy as poor or moderate, and they use
electronic banking more moderately than the full population.
3. Young people studying subjects other than economics, mostly men
Cluster 3 includes more men than women (their proportions are 58% and 42%,
respectively), and most of them study technical or other (non-economic) subjects in higher
education. More than half of them regularly work while studying. Their homes are located in
moderately or highly developed regions. Their parents have various levels of education. More
than 80 per cent of them rate their financial literacy as excellent, however, they only use
electronic banking facilities moderately.
4. Young people studying subjects other than economics, mostly women
As Cluster 4 and Cluster 5 do not significantly differ, they have been merged. Similar
to the previous cluster (Cluster 3), the majority (92.5%) participate in technical or other (non-
economic) education. They regularly work during their studies. Their homes are located in
moderately or highly developed regions. Their parents have higher qualifications. More than
70 per cent of them rated their financial literacy as weak to moderate, and the number of users
of electronic banking channels is negligible.
5. Young people from well-off environments (“rich kids”)
Finally, most participants in Cluster 6 are men (their proportion is above 80 per cent),
study subjects other than economics, and do not work during their studies. Their homes are
located in moderately or highly developed regions. The majority comes from highly qualified
families. 86% rate their financial literacy as good or excellent, and this is slightly in conflict
with the fact that they regularly use electronic banking facilities but not for all available
financial operations.
The following tables show the clusters as they have been described in above, according
to the responders’ demographic data (Table 2), their self-evaluation of financial literacy and
their banking habits (i.e. usage of e-banking services) (Table3). The respective figures refer to
the number of responders among university students.
36
Judit Sági, László Vasa,
Csaba Lentner
ISSN 2071-789X
RECENT ISSUES IN ECONOMIC DEVELOPMENT
Economics & Sociology, Vol. 13, No. 3, 2020
Table 2. Crosstabs for gender, educational field, working, region's development and parents'
educational level
Crosstab
Count
gender
Total
education field
Total
male
female
economics
engineering,
technology
other
Ward
Method
1
473
1904
2377
2310
15
52
2377
2
853
296
1149
872
13
264
1149
3
1203
866
2069
13
1421
635
2069
4
204
4213
4417
433
1954
2030
4417
5
12
1706
1718
27
32
1659
1718
6
3319
641
3960
76
113
3771
3960
Total
6064
9626
15690
3731
3548
8411
15690
working
Total
region's development
Total
no
yes
GDP per
capita
below
75% of
average
GDP per
capita
between
75%-100%
GDP per
capita
above100%
Ward
Method
1
586
1791
2377
611
1685
81
2377
2
845
304
1149
1029
107
13
1149
3
850
1219
2069
13
1020
1036
2069
4
682
3735
4417
530
1632
2255
4417
5
432
1286
1718
11
272
1435
1718
6
3487
473
3960
47
2272
1641
3960
Total
6882
8808
15690
2241
6988
6461
15690
parents' educational level
Total
primary-
primary
primary-
secondary
primary-
higher
secondary-
secondary
secondary-
higher
higher-
higher
Ward
Method
1
317
248
457
1272
75
8
2377
2
135
349
155
471
15
24
1149
3
388
301
132
806
343
99
2069
4
37
47
8
1154
2599
572
4417
5
19
43
5
22
1301
328
1718
6
9
84
21
213
1114
2519
3960
Total
905
1072
778
3938
5447
3550
15690
Source: own from SPSS
37
Judit Sági, László Vasa,
Csaba Lentner
ISSN 2071-789X
RECENT ISSUES IN ECONOMIC DEVELOPMENT
Economics & Sociology, Vol. 13, No. 3, 2020
Table 3. Crosstabs for self-evaluation of financial literacy, and e-banking
Crosstab
Count
self-evaluation of financial literacy
Total
1
2
3
4
5
Ward Method
1
345
56
341
859
776
2377
2
792
0
352
5
0
1149
3
13
228
64
76
1688
2069
4
1253
622
1187
1310
45
4417
5
23
11
1242
439
3
1718
6
3
40
503
386
3028
3960
Total
2429
957
3689
3075
5540
15690
ebank
Total
1
2
3
4
5
Ward Method
1
0
0
98
519
1760
2377
2
53
251
645
45
155
1149
3
663
734
349
6
317
2069
4
2159
718
1476
25
39
4417
5
2
0
94
948
674
1718
6
56
789
1994
616
505
3960
Total
2933
2492
4656
2159
3450
15690
Source: own from SPSS
We examined what institutional solution the above groups would expect to improve
financial literacy: whether it was educational institutions, civil society organisations or
government organisations. The findings show that the more ambitious students, studying
economics, characteristically consider the role undertaken by educational institutions
collaborating with the foundations of the National Bank of Hungary and by civil society
organisations as good examples. Nevertheless, they think the future of the authentic
dissemination of financial information lies with privately established civil society
organisations, and they are willing to donate for such a goal once they become an independent
earners. The majority of the respondents are, however, uncertain or refuse the role of
foundations established by commercial banks. The only exception to this rule are those who
come from less developed regions, who consider the presence of bigger banks necessary also
in the field of financial literacy (Table 4).
38
Judit Sági, László Vasa,
Csaba Lentner
ISSN 2071-789X
RECENT ISSUES IN ECONOMIC DEVELOPMENT
Economics & Sociology, Vol. 13, No. 3, 2020
Table 4. Trust in NGOs / central bank's non-profit organisations/financial institutions' non-
profit organisations in improving financial literacy (The respective figures show how strongly
the responders put their trust in NGOs / central bank's non-profit organisations / financial
institutions' non-profit organisations in improving financial literacy, measured by a Likert
scale.)
Crosstab
Count
NGOs
Total
1
2
3
4
5
Ward Method
1
18
65
4
2011
279
2377
2
23
32
17
296
781
1149
3
10
49
3
1943
64
2069
4
165
35
1562
2257
398
4417
5
126
614
390
127
461
1718
6
87
13
99
2314
1447
3960
Total
429
808
2075
8948
3430
15690
central bank's non-profit organisations
Total
1
2
3
4
5
Ward Method
1
109
101
635
157
1375
2377
2
83
31
4
768
263
1149
3
128
773
1066
14
88
2069
4
37
148
4013
15
204
4417
5
40
1
1417
167
93
1718
6
10
69
1085
1346
1450
3960
Total
407
1123
8220
2467
3473
15690
financial institutions' non-profit
organisations
Total
1
2
3
4
5
Ward Method
1
327
1872
78
54
46
2377
2
3
543
55
505
43
1149
3
14
1911
15
42
87
2069
4
224
2829
801
392
171
4417
5
111
1391
127
31
58
1718
6
79
3260
521
34
66
3960
Total
758
11806
1597
1058
471
15690
Source: own from SPSS
Note that the high refusal rate of commercial banks is presumably due to the high ratio
of subprime household loans, amounting to 28 per cent of GDP, and disbursed between 2004
and 2008 and settled in foreign exchange, and to the drastic exchange rate deterioration caused
by the crisis (Bodzási, 2019). Due to insolvency, nearly 25 per cent of the total population of
Hungary was (directly or indirectly) affected, litigations and legal disputes between the
population and banks became endemic, and this is deeply set in the memories of the population.
A more thorough analysis of this matter requires further research.
39
Judit Sági, László Vasa,
Csaba Lentner
ISSN 2071-789X
RECENT ISSUES IN ECONOMIC DEVELOPMENT
Economics & Sociology, Vol. 13, No. 3, 2020
Conclusion
In this study, financial literacy is analysed through the example of a country located in
the post-socialist region, which has different socialisation, financial literacy and debt behaviour
trajectories than Anglo-Saxon countries (Cwynaret al., 2019). Based on a representative sample
of students, the findings concerning the financial literacy and the attitudes of the respondents
forecast the social challenges to be faced in the future in this small country, which is still
considered as an emerging market economy, due to the late rise of the middle class. In Hungary,
the voluntarily organised non-government organisations proven by this research to be
indispensable in improving financial literacy are extremely rare. In the case of non-profit
institutions established by private capitalists as a result of an organic capital accumulation, the
founder’s business interest and the desired social goal that provides a basis for the
organisation’s operation are de facto separate. By contrast, in the case of the foundations of
commercial banks, the respondents typically rated the social consideration that served the
improvement of financial literacy as secondary. As for the latter, the respondents strongly
presumed the bank’s concealed marketing considerations and criticised that financial
institutions reinvested only a small fragment of their profit into the society. The respondents
consider the National Bank of Hungary’s efforts at improving financial literacy considerably
more trustworthy and beneficial to society.
In addition, the findings of the survey confirm that in improving financial literacy,
educational institutions have the primary role (Swieckaet al., 2020), as the non-profit
organisations established by commercial banks, by the central bank or by civil society
stakeholders, which are at the heart of this study, may have a secondary (complementary) role
in raising financial awareness. In our opinion, teaching finance should start primarily in the
family and at school. Note, however, that the students of economic (and technological) higher
educational institutions perform at a significantly higher level than those at other institutions.
The respondents’ financial literacy is further explained by the family background, the level of
development in their home regions and the students’ work experience. Foundations established
by banks and the central bank are involved in the dissemination of financial information; and
by undertaking multiple tasks, they promote the spread of practical financial skills and of
financial and banking innovations. However, there are NGO’s established by private person
founders, and as the respondents clearly associate the aim of improving social welfare with such
organisations, they do not have any entity they could trust for financial and charity purposes.
Due to poorly developed financial literacy, the central bank and its foundations focusing
their activities on financial literacy have a key role, as also confirmed by the respondents. The
research findings prove that commercial banks’ foundations are considerably less efficient in
reaching social stakeholders, primarily due to the lack of confidence in them. Our paper
highlights that the civil society is able to provide sustainable funding to the institutionalised
concept of raising financial awareness and improving financial literacy among young adults,
independent of state budgets and central bank funding. Civil society organisations could be
instrumental in reaching the younger generation endeavouring to acquire financial literacy, as
young people have confidence in them for advice in the management of their finances (and they
have less confidence in institutions meant to improve financial literacy with a commercial
banking background).
40
Judit Sági, László Vasa,
Csaba Lentner
ISSN 2071-789X
RECENT ISSUES IN ECONOMIC DEVELOPMENT
Economics & Sociology, Vol. 13, No. 3, 2020
References
Ackerman, P. L., & Wolman, S. D. (2007). Determinants and validity of self-estimates of
abilities and self-concept measures. Journal of Experimental Psychology: Applied, 13(2),
5778. https://doi.org/10.1037/1076-898X.13.2.57
Agarwal, S., Amromin, G., Ben-David, I., Chomsisengphet, S., & Evanoff, D. D. (2014).
Predatory lending and the subprime crisis. Journal of Financial Economics, 113(1), 29-
52. https://doi.org/10.1016/j.jfineco.2014.02.008
Ameriks, J., Caplin, A., & Leahy, J. (2003). Wealth accumulation and propensity to plan.
Quarterly Journal of Economics, 118(3), 1007-1047.
https://doi.org/10.1162/00335530360698487
Atkinson, A., & Messy, F. (2013). Promoting Financial Inclusion through Financial
Education: OECD/INFE Evidence, Policies and Practice. OECD Working Papers on
Finance, Insurance and Private Pensions, No. 34, OECD Publishing,
Paris, https://doi.org/10.1787/5k3xz6m88smp-en
Bateman, Z., Eckert, C., Geweke, J., Louviere, J., Thorp, S., & Satchell, S. (2011). Financial
Competence and Expectations Formation: Evidence from Australia. Economic Record,
88(280), 39-63.
Bazley, W. J., Bonaparte, Y., & Korniotis, G. M. (2020). Financial Self-awareness: Who Knows
What They Don’t Know? Finance Research Letters; No. 101445.
http://dx.doi.org/10.1016/j.frl.2020.101445
Beal, D. J., & Delpachitra, S. B. (2003). Financial literacy among Australian university
students. Economic Papers, 22(1), 65-78. https://doi.org/10.1111/j.1759-
3441.2003.tb00337.x
Berková, K., & Krpálek, P. (2017). Approaches to the development of cognitive process
dimensions in financial literacy: an empirical study. Journal of International Studies,
10(3), 173-188. doi:10.14254/2071-8330.2017/10-3/13
Bilan, Y., Mishchuk, H., Samoliuk, N., & Yurchyk, H. (2020). Impact of Income Distribution
on Social and Economic Well-Being of the State. Sustainability, 12(1), 429.
doi:10.3390/su12010429
Bodzási, B. (2019). Legislative steps in Hungary to address issues connected with foreign
currency-based consumer loans. In B. Bodzási (Eds.) Foreign currency lending in
Hungary: A legal and economic analysis of foreign currency lending. Budapest: Corvinus
University of Budapest, 55-89.
Calcagno, R., & Monticone, C. (2015). Financial literacy and the demand for financial advice.
Journal of Banking & Finance, 50, 363380.
https://doi.org/10.1016/j.jbankfin.2014.03.013
Chen, H., & Volpe, R. P. (1998). An analysis of personal financial literacy among college
students. Financial Services Review, 7(2), 107-128, https://doi.org/10.1016/S1057-
0810(99)80006-7
Clark, R., d’Ambrosio, M., McDermed, A., & Sawant, K. (2006). Retirement Plans and Saving
Decisions: The Role of Information and Education. Journal of Pension Economics and
Finance, 5(1), 45-67.
Courchane, M., & Zorn, P. (2008) Consumer Credit Literacy: What Price Perception. Journal
of Economics and Business, 60, 125-138.
Croy, G., Gerrans, P., & Speelman, C. (2010). The Role and Relevance of Domain Knowledge,
Perceptions of Planning Importance, and Risk Tolerance in Predicting Savings Intentions.
Journal of Economic Psychology, 31(6), 860-871.
41
Judit Sági, László Vasa,
Csaba Lentner
ISSN 2071-789X
RECENT ISSUES IN ECONOMIC DEVELOPMENT
Economics & Sociology, Vol. 13, No. 3, 2020
Cull, M., & Whitton, D. (2011). University Students’ Financial Literacy Levels: Obstacles and
Aids. The Economic and Labour Relations Review, 22(1), 99114.
https://doi.org/10.1177/103530461102200106
Cwynar, A., Cwynar, W., Baryla-Matejczuk, M., & Betancort, M. (2019). Sustainable Debt
Behaviour and Well-Being of Young Adults: The Role of Parental Financial Socialisation
Process. Sustainability, 11(24), 7210. https://doi.org/10.3390/su11247210
Csaba, L. (2019). Unorthodoxy in Hungary: an Illiberal Success Story? Post-Communist
Economies Paper, 14, https://doi.org/10.1080/14631377.2019.1641949
Dahlstrom, R. N. (2014). How to recover trust in the banking industry? A game theory approach
to empirical analyses of bank and corporate customer relationships. International Journal
of Bank Marketing, 32(4), 268-278. https://doi.org/10.1108/IJBM-03-2014-0042
Dhandayuthapani, S. P., & Vinothkumar, N. (2020). Financial Literacy and its Determinants.
International Journal for Research in Applied Science & Engineering Technology, 8
(VII), 1174-1179. https://doi.org/10.22214/ijraset.2020.30445
Dobák, P., & Sági, J. (2005). Fogyasztási hitelek: növekvő eladósodottság? (Retail loans:
increasing indebtedness?) Hitelintézeti Szemle/ Financial and Economic Review, 4(1), 1-
27.
Falk, A., Becker, A., Dohmen, T., Enke, B., Huffman, D., & Sunde, U. (2018). Global Evidence
on Economic Preferences. The Quarterly Journal of Economics, 133(4), 16451692.
https://doi.org/10.1093/qje/qjy013
Fernandes, D., Lynch, J. G., & Netemeyer, R. (2014). Financial Literacy, Financial Education,
and Downstream Financial Behaviors. Management Science, 60(8), 1861-1883.
https://doi.org/10.1287/mnsc.2013.1849
Fox, J., Bartholomae, S., & Lee, J. (2005). Building the case for financial education. Journal of
Consumer Affairs, 39, 195-214. https://doi.org/10.1111/j.1745-6606.2005.00009.x
Galperti, S.A. (2017). Theory of Personal Budgeting. SSRN Electronic Journal, 58.
https://doi.org/10.2139/ssrn.2964067
Guerrieri, V., & Lorenzoni, G. (2017). Credit Crises, Precautionary Savings, and the Liquidity
Trap. The Quarterly Journal of Economics, 132(3), 14271467,
https://doi.org/10.1093/qje/qjx005
Hanna, M. E., Hill, R. R., & Perdue, G. (2010). School of study and financial literacy. Journal
of Economics and Economic Education Research, 11(3), 29-37.
Hansen, T. (2012). Understanding Trust in Financial Services: The Influence of Financial
Healthiness, Knowledge, and Satisfaction. Journal of Service Research, 15, 280-295.
https://doi.org/10.1177/1094670512439105
Hastings, J. S., Madrian, B. C., & Skimmyhorn, W. L. (2013). Financial Literacy, Financial
Education, and Economic Outcomes. AnnualReview of Economics, 5, 347-373.
https://doi.org/10.1146/annurev-economics-082312-125807
Haynes-Bordas, R., Kiss, D. E., & Yilmazer, T. (2008). Effectiveness of Financial Education
on Financial Management Behavior and Account Usage: Evidence from a ‘Second
Chance’ Program. Journal of Family and Economic Issues, 29(3), 362390.
Hogarth, J. (2006). Financial education and economic development. Paper presented at
Improving Financial Literacy: International Conference Hosted by the Russian G8
Presidency in Cooperation with the OECD. Available online: http://www.
oecd.org/dataoecd/20/50/37742200.pdf (accessed on 19 Jan 2020).
Huszti, E. (2018). Tetrahedron Effect. Public Finance Quarterly, 4, 433-447. Available online:
https://www.penzugyiszemle.hu/pfq/public-finance-quarterly-archive-
articles/tetrahedron-effect (accessed on 19 Jan 2020).
42
Judit Sági, László Vasa,
Csaba Lentner
ISSN 2071-789X
RECENT ISSUES IN ECONOMIC DEVELOPMENT
Economics & Sociology, Vol. 13, No. 3, 2020
Kaiser, T., & Menkhoff, L. (2017). Does Financial Education Impact Financial Literacy and
Financial Behavior, and If So, When? World Bank Policy Research Working Paper, No.
8161, 1-77.https://doi.org/10.1596/1813-9450-8161
Kato, S., Ashley, S.R., & Weaver, R.L. (2018). Insights for Measuring Social Value:
Classification of Measures Related to the Capabilities Approach. Voluntas: International
Journal of Voluntary and Nonprofit Organizations, 29, 558.
https://doi.org/10.1007/s11266-017-9912-7
Kempson, E. (2009). Framework for the Development of Financial Literacy Baseline Surveys:
A First International Comparative Analysis, OECD Working Papers on Finance,
Insurance and Private Pensions, 1, 31. OECD Publishing.
https://doi.org/10.1787/5kmddpz7m9zq-en
Kovács, L., & Terták, E. (2019). Financial Literacy. Theory and Evidence. Bratislava: Verlag
Dashöfer, Vydavatelstvo Publishing, 150.
Lentner, Cs. (2020). East of Europe, West of Asia. L’Harmattan Publishing, Paris, 304.
Lentner, Cs., Szegedi, K., & Tatay, T. (2015). Corporate Social Responsibility in the Banking
Sector. Public Finance Quarterly, 60(1), 95-103.
Lusardi, A., Mitchell, O. S., & Curto, V. (2010). Financial Literacy among the Young. Journal
of Consumer Affairs, 44, 358-380. https://doi.org/10.1111/j.1745-6606.2010.01173.x
Lusardi, A., & Tufano, P. (2015). Debt literacy, financial experiences, and over indebtedness.
Journal of Pension Economics and Finance, 14(04), 332368.
https://doi.org/10.1017/s1474747215000232
Lynch J. G., Netemeyer, R., Spiller, S. A., & Zammit, A. (2010). A generalizable scale of
propensity to plan: The long and the short of planning for time and money. J. Consumer
Res., 37(June), 108-128. https://doi.org/10.1086/649907
Maas, K., & Liket, K. (2011). Social impact measurement: Classification of methods. In R.
Burritt, S. Schaltegger, M. Bennett, T. Pohjola, & M. Csutora (Eds.), Environmental
Management Accounting and Supply Chain Management, 27, Dordrecht: Springer, 171
202.
Madaras, A., & Varga, J. (2014). Changes in Education Funding in Hungary. Acta Universitatis
Sapientuae Economics and Business, 2, 59-74. https://doi.org/10.2478/auseb-2014-0010
Maier, F., Schober, C., Simsa, R., & Millner, R. (2015). SROI as a Method for Evaluation
Research: Understanding Merits and Limitations. Voluntas: International Journal of
Voluntary and Nonprofit Organizations, 26(5), 18051830.
https://doi.org/10.1007/s11266-014-9490-x
Mandell, L., & Schmid Klein, L. (2009). The Impact of Financial Literacy Education on
Subsequent Financial Behavior. Journal of Financial Counseling and Planning, 20(1),
15-24.
Marcolin, S., & Abraham, A. (2006). Financial literacy research: current literature and future
opportunities, 11. In P. Basu, G. O'Neill & A. Travaglione (Eds.), Proceedings of the 3rd
International Conference on Contemporary Business, Leura NSW, Australia: Faculty of
Commerce, Charles Stuart University
Matolcsy, Gy. (2016). Economic balance and growth. Kairosz Publishing, Budapest. 680.
McCormick, M. H. (2009). The Effectiveness of Youth Financial Education: A Review of the
Literature. Journal of Financial Counseling and Planning, 20(1), 70-83.
Mihályi, P., & Szelényi, I. (2019). The Place of Rent-Seeking and Corruption in Varieties of
Capitalism Models. In T. Gerőcs, and M. Szanyi (eds.), Market Liberalism and Economic
Patriotism in the Capitalist World-System, Cham: PalgraveMacmillan, 5, 67-97.
43
Judit Sági, László Vasa,
Csaba Lentner
ISSN 2071-789X
RECENT ISSUES IN ECONOMIC DEVELOPMENT
Economics & Sociology, Vol. 13, No. 3, 2020
Mitchell, O. S., & Lusardi, A. (2015). Financial Literacy and Economic Outcomes: Evidence
and Policy Implications. SSRN Electronic Journal, 01, 1-15.
https://doi.org/10.2139/ssrn.2568732
Németh, E., & Zsótér, B. (2019). Anxious spenders: Background factors of financial
vulnerability. Economics and Sociology, 12(2), 147-169. doi:10.14254/2071-
789X.2019/12-2/9
OECD-INFE (2016). International Survey of Adult Financial Literacy Competencies. OECD,
Paris. Available online: www.oecd.org/finance/OECD-INFE-International-Survey-of-
Adult-Financial-Literacy-Competencies.pdf (accessed on 19 Jan 2020).
OECD-INFE (2018). Toolkit for Measuring Financial Literacy and Financial Inclusion, OECD,
Paris. Available online: https://www.oecd.org/finance/financial-education/2018-INFE-
FinLit-Measurement-Toolkit.pdf (accessed on 19 Jan 2020).
Potrich, A., Vieira, K., & Mendes-Da-Silva, W. (2016). Development of a financial literacy
model for university students. Management Research Review, 39(3), 356-376.
https://doi.org/10.1108/MRR-06-2014-0143
Qizilbash, M. (2002). Development, common foes and shared values. Review of Political
Economy, 14(4), 463480. https://doi.org/10.1080/0953825022000009906
Quach, H. (2016). Does access to finance improve household welfare? Investment Management
and Financial Innovations, 13(2), 76-86. https://doi.org/10.21511/imfi.13(2).2016.08
Rai, K., & Sharma, M. (2019). A Study on Awareness about Digital Financial Services among
Students. SSRN Electronic Journal; 600-607. http://dx.doi.org/10.2139/ssrn.3308732
Remund, D.L. (2010). Financial literacy explicated: The case for a clearer definition in an
increasingly complex economy. J. Consum. Aff. 44, 276-295.
https://doi.org/10.1111/j.1745-6606.2010.01169.x
Rikmann, E., & Keedus, L. (2012). Civic Sectors in Transformation and Beyond: Preliminaries
for a Comparison of Six Central and Eastern European Societies. Voluntas: International
Journal of Voluntary and Nonprofit Organizations, 24(1), 149-166.
https://doi.org/10.1007/s11266-012-9305-x
Rim, H., Yang, S., & Lee, J. (2016). Strategic partnerships with nonprofits in corporate social
responsibility (CSR): The mediating role of perceived altruism and organizational
identification. Journal of Business Research, 69(9), 3213-3219,
https://doi.org/10.1016/j.jbusres.2016.02.035
Robeyns, I. (2006). The capability approach in practice. Journal of Political Philosophy, 14(3),
351376.
Sági, J., & Lentner, Cs. (2018). Certain Aspects of Family Policy Incentives for Childbearing
A Hungarian Study with an International Outlook. Sustainability, 10(11), 3976.
https://doi.org/10.3390/su10113976
Sági, J., & Lentner, Cs. (2019). Post-crisis trends in household credit market behavior: evidence
from Hungary (Literature review). Banks and Bank Systems, 14(3), 162-174.
https://doi.org/10.21511/bbs.14(3).2019.14
Sen, A. (2004). Capabilities, lists, and public reason: Continuing the conversation. Feminist
Economics, 10, 7780.
Shambare, R., & Rugimbana, R. (2012). Financial literacy among the educated: An exploratory
study of selected university students in South Africa. Thunderbird Int'l Bus Rev, 54, 581-
590. https://doi.org/10.1002/tie.21485
Spolaore, E., & Wacziarg, R. (2013). How Deep Are the Roots of Economic Development?
Journal of Economic Literature, 51, 325369. https://doi.org/10.1257/jel.51.2.325
44
Judit Sági, László Vasa,
Csaba Lentner
ISSN 2071-789X
RECENT ISSUES IN ECONOMIC DEVELOPMENT
Economics & Sociology, Vol. 13, No. 3, 2020
Stroschein, S. (2002). NGO Strategies for Hungarian and Roma Minorities in Central
Europe. Voluntas: International Journal of Voluntary and Nonprofit Organizations,
13(1), 1-26. https://doi.org/10.1023/A:101479371
Swiecka, B., Yeşildağ, E., Özen, E., & Grima, S. (2020). Financial literacy: the case of Poland.
Sustainability, 12(2), 700. https://doi.org/10.3390/su12020700
Van Rooij, M., Lusardi, A., & Alessie, R. (2011). Financial literacy and stock market
participation. Journal of Financial Economics, 101(2), 449-472.
Walker, M. (2005). Amartya Sen's capability approach and education, Educational Action
Research, 13(1), 103-110. https://doi.org/10.1080/09650790500200279
Ward, J. H. Jr. (1963). Hierarchical Grouping to Optimize an Objective Function. Journal of
the American Statistical Association, 58, 236244.
45
Judit Sági, László Vasa,
Csaba Lentner
ISSN 2071-789X
RECENT ISSUES IN ECONOMIC DEVELOPMENT
Economics & Sociology, Vol. 13, No. 3, 2020
Annex 1
Graph 1. Dendogram using Ward linkage
Source: own from SPSS
... Educational institutions play a key role in the development of financial culture (Sági et al. 2020). Education and majors influence young people's general and financial product awareness, which can result from assessing the financial risk environment through the acquisition of critical thinking skills (Nga et al. 2010). ...
Article
Full-text available
The assessment of consumer behavior regarding the choice of financial instruments may be extremely important in the near future, since the fight between cash and electronic money has reached a turning point, and electronic payments are slowly defeating cash. On one hand, in the long term, this possible separation threatens sustainable development goals, and on the other hand, financial awareness can affect the number of purchases and savings. In a survey of 499 people, we examined the reasons behind their decisions, with a particular focus on financial awareness. The result shows that the vast majority of Hungarian consumers are not yet ready to fully accept electronic payments. It can be stated that financial awareness is not present at all in one-fifth of respondents, and one-third are influenced by habituation in everyday shopping situations, which indicates a lack of financial awareness. Based on our results, we have concluded that our consumers still find it difficult to abandon cash payments. Financial awareness needs to be improved in parallel with the Hungarian government’s strategy to reduce the use of cash.
... In part, this happened because by solving these problems the countries can provide their national economies with their own financial resources, obtain additional income from the export of financial resources to other countries, and counter the threats of a1111111111 a1111111111 a1111111111 a1111111111 a1111111111 global financial risks. This is evidenced by the increase in the number of strategic plans for the financial development of countries [1][2][3][4][5][6][7][8][9][10][11][12][13] and the number of scientific publications [14][15][16][17][18][19][20][21][22][23][24][25][26][27][28][29] on this topic. However, an analysis of strategic plans shows that their main goal is to develop the financial sector of national economies without taking into account the systemic risks of this development. ...
Article
Full-text available
Adequate measurement , assessment , and regulation of financial development stability are key components , the formation of effective macroprudential policies , and the coordination of these policies among countries . However , an analysis materials on the subject shows that work in this area is fragmented ,. In this regard , the purpose of this study is to develop a methodology for diagnosing and regulating the stability of financial development based on a systematic approach. The study used systematic, comparative, and GEO analysis, econometric methods. As a result, new indicators have been developed to diagnose the financial development of countries. The authors also propose criteria, which could be used to signal the need for countercyclical regulation tools. The novelty of the study lies in a systematic approach to the diagnosis and regulation of the stability of financial development. The systemic nature of the study is ensured by the application of the statistical framework of the System of National Accounts. Testing of the developed indicators and criteria was carried out in relation to the OECD+ (Organisation for Economic Co-operation and Development) countries for the period 2007–2020. As a result of the testing, a rating of countries was built according to the level of stability of financial development. This rating highlighted leading countries as well as countries generating systemic risks. The study also assessed the legal grounds behind the introduction of a countercyclical markup by a number of countries. The new diagnostic and regulatory system has a number of advantage—it is highly representative and objective by nature, and has a wide range of applications. The use of this system will improve the complexity and quality of diagnosing and regulating the stability of financial development at the national and global levels, as well as increase the effectiveness of public decision-making.
Article
Purpose The present study examines the significance of financial inclusion in reducing income inequality in the Asian context. Design/methodology/approach This study uses panel estimation techniques such as the Pedroni cointegration test, Kao residual-based test, FMOLS, ARDL and Granger causality, a dataset consisting of the Gini coefficient index, three dimensions of financial inclusion measures and one added variable on financial depth, spanning from 2005 to 2019. Findings The study finds that in the long-run, income inequality disparity is highly influenced by financial inclusion indicators, such as the number of bank branches, deposit accounts, outstanding loans and domestic credit to the private sector. Whereas in the short run, disparities in income are unaffected by all the indicators of financial inclusion. Further, unidirectional causality from financial inclusion indicators to income inequality necessitates the need for policymakers to design policies and programs that would enhance access to financial services as an essential mechanism to reduce income disparity. Originality/value Studies based on a panel of Asian countries that have undergone impressive growth of financial inclusion initiatives since the past decade—but are still facing widening income inequality—are conspicuously rare in the literature. The empirical analysis fills this void by showing the significant role financial inclusion indicators play in steering the Asian economies toward income equality throughout the study period.
Article
Purpose Amid the COVID-19 contamination, people are bound to use contactless FinTech payment services. Because of restrictions on physical movement and avoidance of touching physical money, people willingly choose mobile payment, resulting in enormous growth in FinTech payment service industries. Because of this, this study aims to examine the effect of factors affecting Gen X and Millennials users to use FinTech payment services. Design/methodology/approach The authors used 328 responses collected through convenience sampling of Indian users aged between 26 and 57 years in the Delhi-NCR region who are users of FinTech payment services. Findings The authors’ findings verified that in India, perceived COVID-19 risk, perceived severity for COVID, individual mobility, subjective norms, perceived ease of use and perceived usefulness have statistically significant impacts on FinTech payment services during the COVID-19 pandemic. Structural equation modelling was used to study the proposed research model. Overall, the model predicted 76.9 % of the variation in intention to use FinTech payment services by the abovesaid variables by Indian users during a pandemic. Practical implications This study will provide valuable insight to all FinTech service providers and stakeholders in planning and designing the concerned policy. It will be able to draw the attention of users more. Originality/value This research added a valuable theory to the existing technology adoption model (TAM) theory. It demonstrated the utility of the above variables in adopting and using FinTech payment services, which will help service providers to develop future strategies because of the COVID-19 pandemic.
Article
Full-text available
The rise of financial inclusion in recent years has attracted the attention of environmental economists to assess its role in environmental degradation. Therefore, this study was carried out with the aim of exploring the impact of financial inclusion on environmental degradation in the ASEAN region using balanced panel data for the period 2000–2019. First, panel unit root tests were employed to examine each data series for stationarity. Findings of the panel unit root tests depicted that all data series are stationary at the first difference. Second, Westerlund and Edgerton’s error correction panel cointegration test was employed to handle heterogeneity and cross-sectional dependence. Third, the PMG-ARDL approach was used to explore the long- and short-term effects of financial inclusion on environmental degradation. Findings of the PMG-ARDL found that financial inclusion, energy use, economic growth and urbanization are causing environmental degradation in the ASEAN region. Furthermore, the financial inclusion coefficient is 0.15, which is statistically significant at 5%. In the short run, a 1% increase in financial inclusion results in a 0.15% increase in environmental degradation, ceteris paribus. In the long run, financial inclusion and CO2 have a positive association that is statistically significant at 5% and has a coefficient value of 0.42. This implies that a 1% increase in financial inclusion results in a 0.42% increase in environmental degradation in the long run. Finally, this study recommends that financial inclusion must be incorporated into climate change adaptation efforts at the local, national and regional levels to address the side effects of increased CO2 emissions.
Article
Full-text available
Financial literacy is a path to sustainability and has an important role in ensuring the financial sustainability of individuals, families, enterprises and national economies. The level of these economic indicators such as debt, payment discipline, savings and financial management all translate into prosperity or insolvency and bankruptcy and result partially from financial literacy. The higher the level of financial literacy, especially of young people, the more favourable the level of economic indicators, which translates into the economy and sustainable development. With this study we aim to determine the level of financial literacy of high school students in Poland and to determine whether financial literacy changes according to gender. The most important element that distinguishes our study from the others is that or study was carried out with a large sample of high school students with an average age of 15-16 years. In addition, the effect of gender on financial literacy at an early age was investigated, also comparing the wider themes to the so-called narrow themes. The results of the research demonstrated a good and partially very good, level of financial knowledge of the young people in Poland. 45.3% obtained an average level score and 43.8% achieved a high-level score in financial knowledge. This result shows that they can be rational in their financial decision making. However although, it is understood that gender makes a difference on financial behaviour and use of financial instruments, gender does not make any difference on the level of financial knowledge. Moreover, the financial literacy level of males is found to be higher than females.
Article
Full-text available
Income distribution can cause large-scale transformations in human resources structure, essential changes of economic outputs via its impact on life satisfaction and motivation of work. Thus, the overall objective of this research is to improve methodological tools of income distribution analysis based on identifying the links between different structural indicators of income inequality and the most essential features of social and economic well-being. We conducted comparative analysis of EU Member States and Ukraine. We used structural analysis based on two forms of income distribution—functional (share of “labour” in Gross domestic product - GDP) and household one (ratio of incomes measured by special decile coefficients) to identify income inequality and inconsistencies in distributive strategies. By grouping European countries according to economic well-being (described as GDP per capita) and inequality in income distribution (based on Gini coefficient), we determined apparent tendencies in distributive policies and revealed links between income distribution and connected social-economic features of well-being. We conclude that countries with the most stable and clear patterns in income distribution have distinct connections between the share of labour costs in GDP and successes in social and economic spheres, including human development level, property rights protection, GDP growth, possibilities for taxation and budgeting of social programmes.
Article
Full-text available
Literature shows that parental financial socialisation plays an important role in attaining financial literacy as well as in shaping sustainable financial behaviours and that both translate into increased well-being indicators and financial security on micro- and macroeconomic levels. However, debt literacy and debt behaviour seem to be unique. Very little is known about the childhood financial socialisation process through which adults’ sustainable debt behaviour is shaped and how debt behaviour may affect well-being. This study tests a hierarchical model of childhood financial socialisation consisting of five levels: the anticipatory parental socialisation, and later life financial learning outcomes (particularly, debt literacy levels), financial attitudes, debt behaviour, and well-being. Using data collected from a purposive sample of young adult Poles (N = 600) during the period from 10 to 13 November 2018 and employing structural equation modelling, we have found evidence confirming the hierarchical relationship of literacy–attitude–behaviour. Our data do not support, however, either the hypothesised positive relationship between parental socialisation and objectively measured debt literacy or the assumed relationships between debt behaviour and well-being indicators. We posit that country-specific factors related to generational differences entailed by system-wide transition and the specificity of debt behaviour, respectively, are key for explaining these empirical deviations from the assumed conceptual framework. Finally, we found no significant differences between the models estimated separately for maternally conditioned and paternally conditioned respondents.
Article
Full-text available
In response to a sharp rise in household credit repayment risk after the 2008 crisis, the banking sector was consolidated, borrowing conditions were tightened and the regulatory authorities had to improve the financial literacy of population. The study evaluates the effectiveness of regulatory measures to prevent excessive indebtedness, and analyzes the results of the latest survey of population financial literacy in Hungary after the 2008 financial crisis. The results confirm the scientific studies of different economists and scholars who state that the financial awareness is closely related to household saving and borrowing patterns. The outcomes of the analysis reveal the risks associated with the lack of financial literacy in Hungary. In fact, the financial awareness of households over the past years has not improved significantly either in the wake of losses suffered on FX-based loans, or as a result of the preventive actions undertaken by the government regulatory bodies.
Article
Full-text available
This paper offers a political economy perspective of Hungary under the Orbán regime (2010–18). What specific variety of capitalism emerged from the series of centralising measures pertaining to property, banking, fiscal management and the division among various policy fields? We provide a functional overview of the Hungarian model of the market applying the varieties of capitalism framework. How far did it all succeed? The two hypotheses to be tested are (a) that incremental change translated into a new quality in 2010–18; and (b) that it were the uniquely favourable external conditions rather than institutional and policy innovations that explain less than exceptional outcomes.
Article
Full-text available
1) Background: Financial literacy, its attitudinal and behavioral components are subject to increasing awareness in Hungary, especially after the economical crisis of 2018. 2) Methods: Our study examines the selected aspects of the Hungarian young adults' behavior, using the data of the survey conducted on a representative sample to compare financial knowledge, attitudes, behaviors and habits of the 18-35 year-olds with the group of older ones. We also analyze what kind can describe the selected groups, and whether clusters can be established. 3) Results: Financial consciousness and setting long-term financial goals are less typical among young adults. They intend to reach their financial aims not by decreasing their costs or saving but rather by preparing action plans or undertaking more work. Three clusters were identified: worried spenders, satisfied risk-takers and careful considerers. 4) Conclusions: Financial vulnerability is specific to the worried spenders, this cluster represents almost a quarter of young adults. They live for today, financial problems make their existence harder, this, in turn, causes depression, they do not dispose savings. Furthermore, when comparing this cluster to the two other clusters, their financial knowledge and skills are of lower level, less of them make a budget, their income is lower and they tend not to set financial goals as such. JEL Classification: A22
Article
Full-text available
This article studies the global variation in economic preferences. For this purpose, we present the Global Preference Survey (GPS), an experimentally validated survey data set of time preference, risk preference, positive and negative reciprocity, altruism, and trust from 80,000 people in 76 countries. The data reveal substantial heterogeneity in preferences across countries, but even larger within-country heterogeneity. Across individuals, preferences vary with age, gender, and cognitive ability, yet these relationships appear partly country specific. At the country level, the data reveal correlations between preferences and biogeographic and cultural variables, such as agricultural suitability, language structure, and religion. Variation in preferences is also correlated with economic outcomes and behaviors.Within countries and subnational regions, preferences are linked to individual savings decisions, labormarket choices, and prosocial behaviors. Across countries, preferences vary with aggregate outcomes ranging from per capita income, to entrepreneurial activities, to the frequency of armed conflicts. © The Author(s) 2018. Published by Oxford University Press on behalf of the President and Fellows of Harvard College. All rights reserved.
Article
We examine the influence of financial literacy and perceptions of financial knowledge on households’ financial risk-taking. Greater literacy and self-belief in one’s literacy positively relate to equity ownership. However, self-awareness of illiteracy reduces participation by about 5%. We find that financial self-awareness is impacted by innate traits and environmental elements. Specifically, it is reduced by risk-seeking preferences and rising income but increases with income uncertainty. Overall, we demonstrate that accurate self-assessment has implications for individuals’ portfolio choices, which suggests policy implications for improving financial decision-making.