Consumers’ Financial Knowledge in Central European Countries in the Light of Consumer Research

Consumer protection in the financial market has several dimensions. From a formal point of view, consumer rights are guaranteed by law. Educational programs are implemented in schools and the media to promote knowledge and responsible use of financial products and services. Despite the efforts made, the number of incorrect and suboptimal financial decisions is so high that the risk of households falling into excessive debt remains significant. The limited effectiveness of the law led to the claim that only effective education can reduce the risk of suboptimal financial decisions. Unfortunately, the efforts made in this area are not fully satisfactory. The study of financial knowledge of consumers, which was conducted in Poland in January 2024, aimed to verify consumer errors and their nature. As part of the consumer study, not only declared knowledge was verified, but also actual knowledge. The researchers’ doubts resulted from a comparison of the results of scientific research in this area with the current market situation. Consumers declare a high level of knowledge of economic and financial concepts. In practice, however, they make mistakes that do not only indicate behavioral cognitive errors but also a lack of knowledge. The test questions were constructed in such a way as to verify the declared knowledge (based on verification questions). These showed that the actual level of knowledge was lower than the declared one. A review of the literature and studies of financial knowledge and financial competence of consumers in Central European countries was also carried out. Analysis of the results allowed for the formulation of conclusions regarding the educational gap in relation to social characteristics. The conclusions resulting from the study raise questions about the effectiveness of the educational methods used and indicate possible directions of changes in the consumer regulation policy, the aim of which is to ensure a high level of consumer protection.

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Publication Details

Journal
Journal of risk and financial management
Published
2024-08-23
DOI
https://doi.org/10.3390/jrfm17090379
Primary Topic
Financial Literacy, Pension, Retirement Analysis
Type
article
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article

Consumers’ Financial Knowledge in Central European Countries in the Light of Consumer Research

Georges Daw, Łukasz Gębski
Journal of risk and financial management
Financial Literacy, Pension, Retirement Analysis
article

Consumers’ Financial Knowledge in Central European Countries in the Light of Consumer Research

Georges Daw, Łukasz Gębski
article en

Abstract

Consumer protection in the financial market has several dimensions. From a formal point of view, consumer rights are guaranteed by law. Educational programs are implemented in schools and the media to promote knowledge and responsible use of financial products and services. Despite the efforts made, the number of incorrect and suboptimal financial decisions is so high that the risk of households falling into excessive debt remains significant. The limited effectiveness of the law led to the claim that only effective education can reduce the risk of suboptimal financial decisions. Unfortunately, the efforts made in this area are not fully satisfactory. The study of financial knowledge of consumers, which was conducted in Poland in January 2024, aimed to verify consumer errors and their nature. As part of the consumer study, not only declared knowledge was verified, but also actual knowledge. The researchers’ doubts resulted from a comparison of the results of scientific research in this area with the current market situation. Consumers declare a high level of knowledge of economic and financial concepts. In practice, however, they make mistakes that do not only indicate behavioral cognitive errors but also a lack of knowledge. The test questions were constructed in such a way as to verify the declared knowledge (based on verification questions). These showed that the actual level of knowledge was lower than the declared one. A review of the literature and studies of financial knowledge and financial competence of consumers in Central European countries was also carried out. Analysis of the results allowed for the formulation of conclusions regarding the educational gap in relation to social characteristics. The conclusions resulting from the study raise questions about the effectiveness of the educational methods used and indicate possible directions of changes in the consumer regulation policy, the aim of which is to ensure a high level of consumer protection.

Journal of risk and financial managementVol. 17(9)
SGH Warsaw School of Economics (PL), Université Paris-Saclay (FR)
Peace, Justice and strong institutions
Openalex Percentile: Top 78%
Financial Literacy, Pension, Retirement Analysis
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