Intra-household self-confidence in subjective financial knowledge

Purpose This article examines the subjective financial knowledge of 7,170 heterosexual couples of retail bank clients in France using dyadic data. Specifically, it explores the within-couple gender gap in subjective financial knowledge by considering the differential effects of self-confidence for men and women. Design/methodology/approach Based on responses to the Markets in Financial Instruments Directive (MiFID) questionnaire, we compute the self-assessed financial knowledge of both spouses. We hypothesize that individuals who live as part of a couple and make financial decisions together are less likely to overestimate their own financial knowledge. Findings The results show that individuals tend to self-assess lower levels of financial knowledge in the presence of their spouse. Furthermore, the gender gap in subjective financial knowledge also appears to narrow with spouses together at the bank being 18.7% more likely to report no gap. Nevertheless, we observe a positive association between individual savings and stock market participation and the size of the gender gap in subjective financial knowledge in couples. Research limitations/implications Our empirical work has limitations due to the non-random allocation of subjects across treatments. Practical implications The research findings would help financial advisors, institutions and policymakers to better understand the “togetherness effect” for couples and to develop adequate strategies to account for the influence of joint decision-making on financial confidence and knowledge disparities between spouses. Originality/value Our findings reveal, for the first time, the link between joint decision-making and the gender gap in subjective financial knowledge in France. They offer an indirect method to identify overestimation of financial knowledge in retail client couples when actual knowledge is unknown.