Financial Literacy in Focus

Financial Literacy and Risk- Taking of Households in the Hungarian Central Great Plain

Katalin Botos
DSc, University Professor, University of Szeged, Pázmány Péter Catholic University

József Botos
Economist, retired Assistant Professor, former Director General of the Central Administration of National Insurance

Dániel Béres
PhD student, Szent István University, Associate of the State Audit Office of Hungary

József Csernák
Assistant Lecturer, Károly Róbert College

Erzsébeth Németh
Phd, Head of Department, Department of Communications and Parliamentary Relations, State Audit Office of Hungary

Published in: Public Finance Quarterly 2012/3 (p. 267-285.)

Summary: The intense innovational activity typical of the financial sector in the last 30 years requires households to have increasingly comprehensive and complex financial knowledge. The main objective of our study, therefore, was to assess and evaluate risk management activity, which is an integral part of financial literacy, using the questionnaire survey focusing on households of the Central Great Plain and conducted by the Kossuth College of Lakitelek as basis. We have determined that the households examined are conservative with respect to their finances and strive to minimise risks as much as possible, which is commendable. Unfortunately, however, they lack the financial knowledge to make prudent decisions. In truth, risk management strategy based on inadequate knowledge, but thought to be sound is nothing more than a substitution of risk types, the significance of which households are unable to assess realistically as they lack necessary financial knowledge.

Keywords: financial literacy, risk, risk management, Central Great Plain

Journal of Economic Literature (JEL) kód: D12, D14, D69, D82, G02, G20, H31, Z13

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