University of Twente Student Theses
Examining Financial Literacy Overconfidence Discrepancies among Dutch Residents
Daggenvoorde, T.G. (2025) Examining Financial Literacy Overconfidence Discrepancies among Dutch Residents.
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| Abstract: | This thesis examines the impact of a question difficulty categorization on 3 forms of overconfidence, as identified in past research, in the context of financial literacy. It also explores various behavioural aspects related to answering the knowledge questions and making the estimates. The first part of the analysis looks into the emerging levels of financial literacy, (mis)perceptions and (mis)calibrations, expected overconfidence patterns regarding task difficulty effects, and socio-demographic dissimilarities. This is done by partially replicating past research on financial literacy levels by Van Rooij et al. (2011) and judgmental overconfidence in question sets of distinct difficulty by Moore and Healy (2008). Regarding the latter, the applied financial literacy context is distinct. Previous research indicates the desire of an overconfidence analysis in this specific context from multiple angles, in which the examination of the therefore necessary financial literacy levels is a resulting intermediate step. The second part of the analysis revolves around respondents’ behaviour in making these estimates and answering the knowledge questions, taking into account distinctions in click and time data, breaks, perceived confidence in the assembled estimates, and their demonstrated variances. Consequently, it extends past research by offering further related behavioural-specific insights. By conducting an online survey with a 2x3 within-subjects experimental design, relying on fair measurement of the knowledge questions, it finds patterns of estimation and placement misperceptions that are mostly in line with the expected task difficulty effects. Overprecision appears on a more varying basis, even within the more difficult question sets. The findings are somewhat in line, but also in part deviating from past research, considering that the difficulty level is found not to be dispersed across the entire possible scale; questions were generally perceived easier than expected. Following descriptions and explanations from the literature, there are nevertheless some statistical and methodological considerations that should be taken with caution when interpreting these results. The second part of the analysis finds that both click and time data show quite comparable mean values across the distinct question difficulty levels and the SPIES estimates, and are distributed fairly evenly across the distinct SPIES estimates per set as well. The latter is especially interesting, taking into account the higher uncertainty in the estimates for others, and the therefrom potentially resulting respondent fatigue or (increased) misunderstanding. Furthermore, the data indicates a pattern of converging estimation and placement misperceptions when respondents take a break between the sets. Regarding reported confidence in both SPIES estimates, estimation misperceptions differed significantly between respondents who indicated having more confidence in their SPIES1 (for oneself) than in their SPIES2 (for others) estimates, and those who showed either an opposing confidence relationship or equal levels. After totalling, respondents from the primer group expressed significantly less underestimation, while being closer to the ceiling scale-end in all aspects. No significant differences in overplacement have therein been observed. This is also considered intriguing, recalling the distinct financial literacy levels and SPIES perceptions across the groups. Lastly, no significant differences in full-estimates were found in this comparison, neither were differences observed when comparing SPIES1 and SPIES2. |
| Item Type: | Essay (Master) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Programme: | Business Administration MSc (60644) |
| Link to this item: | https://purl.utwente.nl/essays/105182 |
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