Financial Literacy and Financial Behaviour in Thailand: A Pilot Test

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Prajya Ngamjan

Abstract

This study aims to explore financial behaviour, level of financial literacy, and relationship between them. The study has carried out a pilot on-line questionnaire designed to adapt to the
Thai culture and tested on a small sample of 78 Thai respondents. The findings are that financial behaviours of the respondents are relatively good, and the financial literacy level is relatively high:
more than 60 percent of the respondents could answer three or more questions of financial literacy correctly. This is not a surprise, since almost all of the respondents are well-educated with
a bachelor’s or higher degree. However, in terms of plan ahead behaviour, about 70 percent of the respondents reported that they do not have plan for their retirement, and about 50 percent reported that they will start plan for their retirement when they are over 40 years old. This can aggravate to having inadequate fund for retirement, which can be a serious problem to both households and the society at large. This may partially be explained by the prevailing attitude of living-for-today in the Thai culture. Regarding financial literacy, the respondents seem to perform well on interest and mortgage questions, but did poorly on risk diversification, bond price, and inflation. This implies that they might not be familiar with bond investment, the concept of risk diversification, and inflation. Therefore, in order to promote investment in financial markets, a considerable room for improvement in these areas is needed. Logistic regressions are carried out, where a positive association is found between financial literacy and financial behaviour of the Thai sample, nonetheless the relationship is not statistically significant. This may be explained by the small sample size and the cognitive bias that despite high level of education and financial literacy, individuals might still make an unsound financial decision.

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Research Article