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1, February 2013
DOI: 10.7763/IJEEEE.2013.V3.195 68
International Journal of e-Education, e-Business, e-Management and e-Learning, Vol. 3, No. 1, February 2013
administrators, community interest groups, and other general financial management knowledge, savings and loans,
organizations [1]. Even though the Ministry of Education of insurance, and investment.
Taiwan began incorporating financial management education In 2006, Financial Service Authority divided financial
into elementary school curriculum guidelines in 2011, past literacy into four types of budget, expenditure, products, and
empirical studies have indicated that elementary and junior information [13]. Widdowson and Hailwood [14] indicated
high school teachers also have the problems of insufficient that financial literacy includes basic computation ability,
financial management knowledge and few opportunities for understanding the yields and risks of financial decisions,
on-the-job study and advancement. familiarity with basic financial management concepts,
As previously mentioned, financial literacy appears to be knowing the channels for consultation and assistance, and the
directly correlated with financial self-beneficial behavior [6]. ability to understand the content of suggestions. In sum,
A lack of financial literacy can contribute to the making of financial literacy includes the following three areas: general
poor financial choices that can be harmful to both individuals financial management knowledge, the ability to search for
and communities [7]. However, a question exists concerning and understand financial management information, and the
the effectiveness of a teachers personal financial literacy in decision-making and responsibility in financial management.
delivering financial education. Teachers own lack of
B. Financial Education
financial literacy would inhibit their teaching financial
education in the classroom. A growing literature has looked into the impact of
As such, the present study inferred that the effectiveness of financial education in the classroom and has investigated
financial education delivered by teachers may be affected by whether these financial education programs are effective in
the extent of their personal financial literacy. In this study, improving financial literacy and financial behavior. Financial
elementary school teachers in Taiwan were used as research behavior seems to be positively affected by financial literacy
subjects to examine the impact of financial literacy of [15], but the impacts of various forms of financial education
teachers on their teaching financial education in the on financial behavior are less certain: results of related
classroom. Results buttressed our contention that there is a research have shown mixed results. For example, Lusardi and
positive correlation between teachers financial literacy and Mitchell [16] showed that retirement seminars had a positive
financial education teaching. These results can add to work in wealth effect, but such an effect was found mainly for those
this area and can serve as a reference for later policies with less wealth or education. On the other hand, Choi,
established by the government. Laibson, Madrian, and Metrick [17] claimed that participants
in retirement seminars had better intentions than follow
through.
II. LITERATURE REVIEW Mandell and Kleins empirical study provided evidence to
support the presence of student motivation as a factor in
A. Financial Literacy increasing their financial literacy which suggests that
Financial literacy is commonly defined as the ability of motivated adults benefit from targeted financial education
individuals to make appropriate decisions in managing their [15]. However, these findings were disproved in a later study
personal finances. More specifically, financial literacy is the by Mandell and Klein [6], in which it was found that college
ability to understand how money works in the world: how students who took financial education courses did not
someone manages to earn or make it, how that person evaluate themselves to be more savings-oriented and did not
manages or invests it, and how that person donates it to help appear to have better financial behaviors than those who had
others [8]. Financial literacy and personal financial not taken the courses.
management refer to the set of skills and knowledge that Although the evidence is mixed, we can generally
allows an individual to make informed and effective conclude from the literature that there is a need for financial
decisions with all of their financial resources. education programs because they do improve the behavior
Bernheim [9] was among the first to emphasize that most and outcomes of their graduates; there is a connection
individuals lack basic financial numeric knowledge. These between knowledge/construct and behavior, with increases in
factors, together with a likely contraction of international financial knowledge/construct having a positive impact on
capital flows, increase the importance of financial literacy for personal finance behaviors; and that financial education
consumers in almost every country. Kefela [7] argued that programs that cover specific topics and teach skills are better
financial literacy is crucial at many levels. It is an essential than those covering more general subjects. Construct refers
element in enabling people to manage their financial affairs to an individuals perceptions, ideals, and values in regards to
and can make an important contribution to the soundness and something and its associated traits, as well as the role and
efficiency of the financial system, and to the performance of behavioral inclinations in which the individual engages.
the economy. Financial literacy helps improve the efficiency and quality
Rejda and McNamara [10] suggested that personal of financial services. Specifically, financial education can
financial management is the establishment of comprehensive better provide an individual financial literacy, through which
plans based on definitive financial objectives in order to to familiar and understand financial market products,
achieve them. Lusardi and Olivia [11] showed that financial especially rewards and risks, in order to make informed
literacy is highly correlated with exposure to economics in choices. Basic financial education should be made relevant
schools. Chen and Volpe [12] mentioned that the content of and useful to peoples daily lives and development activities
financial literacy should be divided into the four areas of [7].
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International Journal of e-Education, e-Business, e-Management and e-Learning, Vol. 3, No. 1, February 2013
Tennyson and Nguyen [18] examined the effectiveness of 6.4%, the total explained variance is 61%, showing that the
school mandates regarding personal finance on knowledge extracted factors have sufficient representativeness. The
levels. Their survey data came from the Jump$tart 1997 questionnaires overall reliability Cronbachs =0.95, which
survey of high school senior students. The survey contained is high reliability.
31 multiple choice questions covering four personal finance Financial Education Teaching Questionnaire consists of
topics and also included questions covering individual 28 question items divided into 3 factors: Importance of
demographic and family characteristics. Tennyson and financial education (12 items), Instructional design and
Nguyen [18] indicated that financial education can improve evaluation (11 items), Accommodating financial education (5
financial literacy if the mandate requires the teaching of items); the individual explained variances are 26.3%, 21.7%,
personal finance concepts within a specific course. 9.6%, the total explained variance is 57.6%; the
Prior literature also points out that financial education questionnaires overall reliability Cronbachs =0.9.
delivered by teachers may be affected by demographic
B. Sample and Data Collection
variables (e.g., gender, age, highest degree earned, college
major, subject currently teaching, and socioeconomic status). This study treated 400 public elementary school teachers
each in Taipei City and Yunlin County as research subjects,
and used convenience sampling to release the questionnaires.
III. METHODOLOGY A total of 800 questionnaires were released, and 515 were
retrieved. After eliminating invalid questionnaires, the
A. Measures number of valid questionnaires was 494, with valid retrieval
This study used the self-compiled Financial Literacy and rate of 62%. After encoding and filing, the valid
Financial Education Teaching Questionnaires as the questionnaires were analyzed using descriptive statistics,
measurement tool, and collected data on variables in three factor analysis, validity analysis, reliability analysis, t-test,
parts: demographic variables (including gender, age, highest one-way ANOVA, and canonical correlation analysis.
degree earned, college major, number of years teaching,
number of years teaching social studies, school location, and
school size), elementary school teacher financial literacy IV. EMPIRICAL RESULTS
questionnaire, and elementary school teacher financial
A. Results of Descriptive Statistical Analysis
education teaching questionnaire.
Questionnaire design is based on literature review and Most of the teachers under study are female, primarily in
reference to questionnaires in related studies to establish the the age group 30-40; the education background of most is a
questionnaires content validity. In addition, related scholars non-social studies education major in teaching colleges and
and experts were invited to evaluate and modify the universities; the number of years teaching and number of
questionnaire content to establish expert validity. The years teaching social studies for most are between 6-10 years
questionnaire used Likert 5-point scale to record points to the and under 5 years; in terms of occupation, most are purely
responses. This study first carried out a pre-test, and then homeroom teachers; most work in schools with between
analyzed the items and made related changes. Results of 25-48 classes.
reliability analysis showed that the two Cronbach values for B. Analysis of Elementary School Teachers Financial
pre-test questionnaires of both financial literacy and financial Literacy
education teaching are over 0.9 (high reliability), thereby In the 31 items on financial literacy questionnaire, the top
sufficing to serve as the basic framework of the official three items with the highest scores are I know that financial
questionnaire. management tools with higher yield would also have higher
With regard to questionnaire construct validity, the values risks, I know about different savings methods, such as:
of KMO and Bartletts sphericity test (chi-square) for certificates of deposit, small savings for lump sum
Financial Literacy Questionnaire and Financial Education withdrawal, and others, and I understand how to maximize
Teaching Questionnaire are significantly different from zero, the value of money through comparative shopping. The
suggesting they are suitable for conducting factor analysis. bottom three items with the lowest scores are I understand
Factor analysis is conducted using principal component the meaning of the Wholesale Price Index published by the
analysis, and Varimax method is used to conduct orthogonal Directorate General of Budget, Accounting and Statistics),
rotation, using the extraction principle of eigenvalue greater I understand the meaning of monitoring indicators
than 1 to extract the dimensions, and variables with factor published monthly by the Council for Economic Planning
loading greater than 0.4 were used as the considerations in And Development, and I understand the various financial
naming dimensions. management information in financial newspapers and
Financial Literacy Questionnaire consists of 31 question magazines.
items divided into 6 factors: Financial planning and
responsibility (6 items), Banking-related business (6 items), C. Elementary School Teachers Financial Education
Issues in economic policy (8 items), Tax and insurance Teaching
planning (5 items), Investment, insurance, and savings (3 In the 28 items on financial education teaching
items), Consumer finances (3 items). The individual questionnaire, the top three items with the highest scores are
explained variances are 13.5%, 11.6%, 11.2%, 11%, 7.3%, Financial education can let students understand the
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International Journal of e-Education, e-Business, e-Management and e-Learning, Vol. 3, No. 1, February 2013
importance of increasing earnings and decreasing spending, literacy and financial education, this study carried out
Financial education is also a part of character education, canonical correlation analysis. Canonical correlation analysis
and Financial education can help students adapt to an is used to identify and measure the associations among two
increasingly diverse living environment. The bottom three sets of variables. Table I shows the results of eigenvalues and
items with the lowest scores are Current elementary school canonical correlations.
textbooks are sufficient in increasing students financial
literacy, I have the ability to develop suitable instructional TABLE II: RESULTS OF DIMENSION REDUCTION ANALYSIS
cases for financial education, and I can use information Roots Wilks L. F Error DF Significance of F
technology to construct a sharing forum for financial 1 to 3 0.552 16.914 1301.56 0.000
2 to 3 0.930 3.447 922.00 0.000
education (i.e., class web page).
3 to 3 0.994 0.744 468.00 0.562
D. Results of Difference Analysis
In exploring whether elementary school teachers with
Financial 0.389
different demographic variables differ in terms of financial planning and Importance of
0.231
literacy, results of the t-test show that: gender reaches a responsibility financial
significant difference level in Financial planning and 0.225 education
responsibility and Banking-related business, and school 0.070
location does not reach the level of significance in any Banking-related 1.180
dimension. Results of one-way ANOVA show that business 1 0.637 1
dimensions of age reaches the level of significant 0.041
difference in Banking-related business, Issues in 0.222
0.833
economic policy, Tax and insurance planning, and Issues in
economic
Consumer finances. policy Instructional
In number of years teaching, other than Financial 0.746
design and
planning and responsibility does not reach the level of evaluation
0.313
significance, all other dimensions show a significant
Tax and
difference. Occupation at school shows a significant insurance 0.002
difference in Issues in economic policy, and other planning
0.833
dimensions do not reach the level of significance. School
0.011
size shows a significant difference in Financial planning
Investment,
and responsibility other dimensions do not reach the level of insurance, 2 0.255 2
significance. Highest degree earned, college major, and and savings
0.048
number of years teaching social studies do not reach the 0.731
level of significance in any dimension. Accommoda-
0.288
ting financial
E. Difference Analysis of Demographic Variables and Consumer education
Teachers Financial Education Teaching finances
0.770 1.235
In exploring whether elementary school teachers with
different demographic variables differ in terms of financial Fig. 1. Canonical correlation analysis and path coefficients.
education, results of the t-test show that: gender reaches a
significant difference level in the importance of elementary
The results of dimension reduction analysis, which are
school financial education, and school location does not
displayed in Table II, show that the predictor sets four
reach the level of significance in any dimension.
variables of financial literacy affect the criterion sets three
Results of one-way ANOVA show that dimensions of
variables of financial education teaching through two pairs of
age reaches the level of significant difference in
canonical dimensions/factors that showed significant
accommodating financial education. Highest degree
difference. More specifically, for this particular model there
earned, college major, number of years teaching,
are three canonical dimensions of which only the first two are
number of years teaching social studies, occupation at
statistically significant. The first test of dimensions tests
school, and school size do not reach the level of
whether all three dimensions combined are significant (they
significance in any dimension of financial education.
are), the next test tests whether dimensions 2 and 3 combined
F. Results of Canonical Correlation Analysis are significant (they are). Finally, the last test tests whether
TABLE I: RESULTS OF EIGENVALUES AND CANONICAL CORRELATIONS dimension 3, by itself, is significant (it is not). Therefore
Cum. Canonical Square
dimensions 1 and 2 must each be significant.
Root No. Eigenvalue Percent As such, these two pairs of canonical dimensions can
percent correlation () correlation (2)
1 0.684 90.033 90.033 0.637 0.406 explain 67% and 7% of total variance in financial education
2 0.069 9.119 99.152 0.255 0.065 teaching. The correlations were estimated through the path
3 0.006 0.848 100 0.080 0.006 analysis, as plotted in Fig. 1. Since the predictor set and
criterion set have the same canonical component loading
In order to verify the relationship between financial
signs, the null hypothesis is thus supported.
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International Journal of e-Education, e-Business, e-Management and e-Learning, Vol. 3, No. 1, February 2013
Department of Business Administration, all in National Formosa University Chun-Lin Chen received his BA in primary education from National
in Taiwan, where he was an Assistant Professor and Associate Professor, HsinChu University of Education (Taiwan) in 1993 and Masters degree in
respectively. Thereafter, he has been a Professor of the Department of financial management from National Formosa University (Taiwan) in 2011.
Business Administration in National Formosa University. His research He is now working for the Office of Student Affairs, Tounan Primary School,
interests are in the areas of business failure prediction, corporate bankruptcy Yunlin, Taiwan. His main research interests include: financial management,
and reorganization, information-based contagion effect, valuation effect, financial education, and corporate governance.
relationship banking, information disclosure and transparency, corporate
governance, human resource management, and motivation and leadership.
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