Table 3 The effect of financial literacy...

Table 3

The effect of financial literacy on vulnerability and digital financial inclusion: MMQR

	(1)	(2)	(3)	(4)
	Vulnerability	Vulnerability	DFS	DFS
Location Low financial literacy	−0.114		−0.08
Location Low financial literacy	(0.096)		(0.055)
High financial literacy	−0.058	−0.025		0.021
High financial literacy	(0.037)	(0.023)		(0.014)
Urban dummy	0.747***	0.746***	0.087**	0.087**
Urban dummy	(0.087)	(0.087)	(0.044)	(0.044)
Educational level	−0.111	−0.114	0.597***	0.599***
Educational level	(0.145)	(0.145)	(0.085)	(0.085)
Employment status	0.077	0.077	0.304***	0.305***
Employment status	(-0.1)	(0.1)	(0.058)	(0.058)
Constant	4.767***	4.573***	0.829***	0.965***
Constant	(0.269)	(0.215)	(0.149)	(0.127)
Scale
Low financial literacy	0.005		−0.03
Low financial literacy	(0.066)		(0.04)
High financial literacy		−0.001		0.022**
High financial literacy		(0.016)		(0.01)
Urban dummy	0.006	0.004	0.046	0.052
Urban dummy	(0.06)	(0.06)	(0.032)	(0.032)
Educational level	−0.333***	−0.33***	−0.249***	−0.246***
Educational level	(0.1)	(0.1)	(0.062)	(0.062)
Employment status	−0.128*	−0.127*	−0.168***	−0.169***
Employment status	(0.069)	(0.069)	(0.042)	(0.042)
Constant	1.905***	1.921***	1.045***	1.107***
Constant	(0.186)	(0.15)	(0.109)	(0.093)
Quantile 1
Low financial literacy	−0.124		−0.028
Low financial literacy	(0.102)		(0.156)
High financial literacy		−0.023		0.101***
High financial literacy		(0.025)		(0.038)
Urban dummy	0.735***	0.739***	−0.077	−0.1
Urban dummy	(0.092)	(0.092)	(0.125)	(0.122)
Educational level	0.527***	0.518***	1.481***	1.481***
Educational level	(0.153)	(0.153)	(0.237)	(0.233)
Employment status	0.323***	0.321***	0.899***	0.911***
Employment status	(0.106)	(0.106)	(0.163)	(0.16)
Constant	1.118***	0.883***	−2.876***	−2.998***
Constant	(0.282)	(0.226)	(0.408)	(0.332)
Quantile 2
Low financial literacy	−0.123		−0.024
Low financial literacy	(0.097)		(0.151)
High financial literacy		−0.023*		0.097***
High financial literacy		(0.024)		(0.036)
Urban dummy	0.736***	0.739***	−0.07	−0.091
Urban dummy	(0.088)	(0.088)	(0.121)	(0.117)
Educational level	0.489***	0.482***	1.447***	1.441***
Educational level	(0.146)	(0.147)	(0.23)	(0.224)
Employment status	0.308***	0.307***	0.876***	0.883***
Employment status	(0.101)	(0.101)	(0.158)	(0.154)
Constant	1.334***	1.095***	−2.736***	−2.815***
Constant	(0.276)	(0.228)	(0.398)	(0.324)
Quantile 3
Low financial literacy	−0.122		−0.024
Low financial literacy	(0.092)		(0.151)
High financial literacy		−0.024*		0.097***
High financial literacy		(0.022)		(0.036)
Urban dummy	0.736***	0.74***	−0.07	−0.091
Urban dummy	(0.083)	(0.082)	(0.121)	(0.117)
Educational level	0.447***	0.429***	1.447***	1.441***
Educational level	(0.139)	(0.137)	(0.23)	(0.223)
Employment status	0.292***	0.286***	0.876***	0.883***
Employment status	(0.096)	(0.094)	(0.158)	(0.154)
Constant	1.574***	1.402***	−2.736***	−2.815***
Constant	(0.259)	(0.205)	(0.395)	(0.318)
Quantile 4
Low financial literacy	−0.122		−0.024
Low financial literacy	(0.09)		(0.151)
High financial literacy		−0.024*		0.097***
High financial literacy		(0.022)		(0.036)
Urban dummy	0.737***	0.74***	−0.07	−0.091
Urban dummy	(0.082)	(0.082)	(0.121)	(0.117)
Educational level	0.433***	0.424***	1.443***	1.438***
Educational level	(0.136)	(0.136)	(0.229)	(0.223)
Employment status	0.286***	0.284***	0.873***	0.881***
Employment status	(0.094)	(0.094)	(0.157)	(0.154)
Constant	1.656***	1.433***	−2.718***	−2.804***
Constant	(0.252)	(0.202)	(0.395)	(0.32)
Quantile 5
Low financial literacy	−0.122		−0.02
Low financial literacy	(0.087)		(0.147)
High financial literacy		−0.024*		0.094***
High financial literacy		(0.021)		(0.035)
Urban dummy	0.737***	0.74***	−0.064	−0.083
Urban dummy	(0.079)	(0.079)	(0.118)	(0.113)
Educational level	0.401***	0.397***	1.415***	1.403***
Educational level	(0.131)	(0.131)	(0.223)	(0.216)
Employment status	0.274***	0.274***	0.855***	0.857***
Employment status	(0.091)	(0.091)	(0.153)	(0.148)
Constant	1.836***	1.588***	−2.601***	−2.644***
Constant	(0.244)	(0.196)	(0.387)	(0.314)
Quantile 6
Low financial literacy	−0.122		−0.02
Low financial literacy	(0.086)		(0.146)
High financial literacy		−0.024*		0.093***
High financial literacy		(0.021)		(0.035)
Urban dummy	0.738***	0.741***	−0.063	−0.082
Urban dummy	(0.078)	(0.077)	(0.117)	(0.113)
Educational level	0.387***	0.376***	1.409***	1.398***
Educational level	(0.129)	(0.128)	(0.227)	(0.219)
Employment status	0.269***	0.266***	0.85***	0.854***
Employment status	(0.089)	(0.089)	(0.155)	(0.151)
Constant	1.917***	1.712***	−2.574***	−2.625***
Constant	(0.238)	(0.19)	(0.418)	(0.356)
Quantile 7
Low financial literacy	−0.122		−0.002
Low financial literacy	(0.086)		(0.125)
High financial literacy		−0.024*		0.08***
High financial literacy		(0.021)		(0.03)
Urban dummy	0.738***	0.741***	−0.037	−0.05
Urban dummy	(0.078)	(0.077)	(0.1)	(0.095)
Educational level	0.387***	0.371***	1.266***	1.247***
Educational level	(0.129)	(0.127)	(0.195)	(0.186)
Employment status	0.269***	0.264***	0.755***	0.75***
Employment status	(0.089)	(0.088)	(0.134)	(0.128)
Constant	1.917***	1.743***	−1.978***	−1.947***
Constant	(0.238)	(0.186)	(0.366)	(0.312)
Quantile 8
Low financial literacy	−0.122		0.01
Low financial literacy	(0.086)		(0.111)
High financial literacy		−0.024*		0.072***
High financial literacy		(0.021)		(0.027)
Urban dummy	0.738***	0.741***	−0.018	−0.032
Urban dummy	(0.078)	(0.077)	(0.089)	(0.086)
Educational level	0.387***	0.371***	1.166***	1.161***
Educational level	(0.129)	(0.127)	(0.177)	(0.171)
Employment status	0.269***	0.264***	0.687***	0.691***
Employment status	(0.089)	(0.088)	(0.121)	(0.117)
Constant	1.917***	1.743***	−1.559***	−1.559***
Constant	(0.237)	(0.185)	(0.356)	(0.318)
Quantile 9
Low financial literacy	−0.121		0.013
Low financial literacy	(0.085)		(0.108)
High financial literacy		−0.024*		0.07***
High financial literacy		(0.021)		(0.026)
Urban dummy	0.738***	0.741***	−0.014	−0.027
Urban dummy	(0.077)	(0.077)	(0.087)	(0.083)
Educational Level	0.375***	0.37***	1.145***	1.139***
Educational Level	(0.127)	(0.127)	(0.172)	(0.165)
Employment status	0.264***	0.263***	0.673***	0.676***
Employment status	(0.088)	(0.088)	(0.118)	(0.113)
Constant	1.987***	1.748***	−1.468***	−1.46***
Constant	(0.233)	(0.184)	(0.343)	(0.302)
Observations	2,697	2,697	2,697	2,697

	(1)	(2)	(3)	(4)
	Vulnerability	Vulnerability	DFS	DFS
LocationLow financial literacy	−0.114		−0.08
LocationLow financial literacy	(0.096)		(0.055)
High financial literacy	−0.058	−0.025		0.021
High financial literacy	(0.037)	(0.023)		(0.014)
Urban dummy	0.747***	0.746***	0.087**	0.087**
Urban dummy	(0.087)	(0.087)	(0.044)	(0.044)
Educational level	−0.111	−0.114	0.597***	0.599***
Educational level	(0.145)	(0.145)	(0.085)	(0.085)
Employment status	0.077	0.077	0.304***	0.305***
Employment status	(-0.1)	(0.1)	(0.058)	(0.058)
Constant	4.767***	4.573***	0.829***	0.965***
Constant	(0.269)	(0.215)	(0.149)	(0.127)
Scale
Low financial literacy	0.005		−0.03
Low financial literacy	(0.066)		(0.04)
High financial literacy		−0.001		0.022**
High financial literacy		(0.016)		(0.01)
Urban dummy	0.006	0.004	0.046	0.052
Urban dummy	(0.06)	(0.06)	(0.032)	(0.032)
Educational level	−0.333***	−0.33***	−0.249***	−0.246***
Educational level	(0.1)	(0.1)	(0.062)	(0.062)
Employment status	−0.128*	−0.127*	−0.168***	−0.169***
Employment status	(0.069)	(0.069)	(0.042)	(0.042)
Constant	1.905***	1.921***	1.045***	1.107***
Constant	(0.186)	(0.15)	(0.109)	(0.093)
Quantile 1
Low financial literacy	−0.124		−0.028
Low financial literacy	(0.102)		(0.156)
High financial literacy		−0.023		0.101***
High financial literacy		(0.025)		(0.038)
Urban dummy	0.735***	0.739***	−0.077	−0.1
Urban dummy	(0.092)	(0.092)	(0.125)	(0.122)
Educational level	0.527***	0.518***	1.481***	1.481***
Educational level	(0.153)	(0.153)	(0.237)	(0.233)
Employment status	0.323***	0.321***	0.899***	0.911***
Employment status	(0.106)	(0.106)	(0.163)	(0.16)
Constant	1.118***	0.883***	−2.876***	−2.998***
Constant	(0.282)	(0.226)	(0.408)	(0.332)
Quantile 2
Low financial literacy	−0.123		−0.024
Low financial literacy	(0.097)		(0.151)
High financial literacy		−0.023*		0.097***
High financial literacy		(0.024)		(0.036)
Urban dummy	0.736***	0.739***	−0.07	−0.091
Urban dummy	(0.088)	(0.088)	(0.121)	(0.117)
Educational level	0.489***	0.482***	1.447***	1.441***
Educational level	(0.146)	(0.147)	(0.23)	(0.224)
Employment status	0.308***	0.307***	0.876***	0.883***
Employment status	(0.101)	(0.101)	(0.158)	(0.154)
Constant	1.334***	1.095***	−2.736***	−2.815***
Constant	(0.276)	(0.228)	(0.398)	(0.324)
Quantile 3
Low financial literacy	−0.122		−0.024
Low financial literacy	(0.092)		(0.151)
High financial literacy		−0.024*		0.097***
High financial literacy		(0.022)		(0.036)
Urban dummy	0.736***	0.74***	−0.07	−0.091
Urban dummy	(0.083)	(0.082)	(0.121)	(0.117)
Educational level	0.447***	0.429***	1.447***	1.441***
Educational level	(0.139)	(0.137)	(0.23)	(0.223)
Employment status	0.292***	0.286***	0.876***	0.883***
Employment status	(0.096)	(0.094)	(0.158)	(0.154)
Constant	1.574***	1.402***	−2.736***	−2.815***
Constant	(0.259)	(0.205)	(0.395)	(0.318)
Quantile 4
Low financial literacy	−0.122		−0.024
Low financial literacy	(0.09)		(0.151)
High financial literacy		−0.024*		0.097***
High financial literacy		(0.022)		(0.036)
Urban dummy	0.737***	0.74***	−0.07	−0.091
Urban dummy	(0.082)	(0.082)	(0.121)	(0.117)
Educational level	0.433***	0.424***	1.443***	1.438***
Educational level	(0.136)	(0.136)	(0.229)	(0.223)
Employment status	0.286***	0.284***	0.873***	0.881***
Employment status	(0.094)	(0.094)	(0.157)	(0.154)
Constant	1.656***	1.433***	−2.718***	−2.804***
Constant	(0.252)	(0.202)	(0.395)	(0.32)
Quantile 5
Low financial literacy	−0.122		−0.02
Low financial literacy	(0.087)		(0.147)
High financial literacy		−0.024*		0.094***
High financial literacy		(0.021)		(0.035)
Urban dummy	0.737***	0.74***	−0.064	−0.083
Urban dummy	(0.079)	(0.079)	(0.118)	(0.113)
Educational level	0.401***	0.397***	1.415***	1.403***
Educational level	(0.131)	(0.131)	(0.223)	(0.216)
Employment status	0.274***	0.274***	0.855***	0.857***
Employment status	(0.091)	(0.091)	(0.153)	(0.148)
Constant	1.836***	1.588***	−2.601***	−2.644***
Constant	(0.244)	(0.196)	(0.387)	(0.314)
Quantile 6
Low financial literacy	−0.122		−0.02
Low financial literacy	(0.086)		(0.146)
High financial literacy		−0.024*		0.093***
High financial literacy		(0.021)		(0.035)
Urban dummy	0.738***	0.741***	−0.063	−0.082
Urban dummy	(0.078)	(0.077)	(0.117)	(0.113)
Educational level	0.387***	0.376***	1.409***	1.398***
Educational level	(0.129)	(0.128)	(0.227)	(0.219)
Employment status	0.269***	0.266***	0.85***	0.854***
Employment status	(0.089)	(0.089)	(0.155)	(0.151)
Constant	1.917***	1.712***	−2.574***	−2.625***
Constant	(0.238)	(0.19)	(0.418)	(0.356)
Quantile 7
Low financial literacy	−0.122		−0.002
Low financial literacy	(0.086)		(0.125)
High financial literacy		−0.024*		0.08***
High financial literacy		(0.021)		(0.03)
Urban dummy	0.738***	0.741***	−0.037	−0.05
Urban dummy	(0.078)	(0.077)	(0.1)	(0.095)
Educational level	0.387***	0.371***	1.266***	1.247***
Educational level	(0.129)	(0.127)	(0.195)	(0.186)
Employment status	0.269***	0.264***	0.755***	0.75***
Employment status	(0.089)	(0.088)	(0.134)	(0.128)
Constant	1.917***	1.743***	−1.978***	−1.947***
Constant	(0.238)	(0.186)	(0.366)	(0.312)
Quantile 8
Low financial literacy	−0.122		0.01
Low financial literacy	(0.086)		(0.111)
High financial literacy		−0.024*		0.072***
High financial literacy		(0.021)		(0.027)
Urban dummy	0.738***	0.741***	−0.018	−0.032
Urban dummy	(0.078)	(0.077)	(0.089)	(0.086)
Educational level	0.387***	0.371***	1.166***	1.161***
Educational level	(0.129)	(0.127)	(0.177)	(0.171)
Employment status	0.269***	0.264***	0.687***	0.691***
Employment status	(0.089)	(0.088)	(0.121)	(0.117)
Constant	1.917***	1.743***	−1.559***	−1.559***
Constant	(0.237)	(0.185)	(0.356)	(0.318)
Quantile 9
Low financial literacy	−0.121		0.013
Low financial literacy	(0.085)		(0.108)
High financial literacy		−0.024*		0.07***
High financial literacy		(0.021)		(0.026)
Urban dummy	0.738***	0.741***	−0.014	−0.027
Urban dummy	(0.077)	(0.077)	(0.087)	(0.083)
Educational Level	0.375***	0.37***	1.145***	1.139***
Educational Level	(0.127)	(0.127)	(0.172)	(0.165)
Employment status	0.264***	0.263***	0.673***	0.676***
Employment status	(0.088)	(0.088)	(0.118)	(0.113)
Constant	1.987***	1.748***	−1.468***	−1.46***
Constant	(0.233)	(0.184)	(0.343)	(0.302)
Observations	2,697	2,697	2,697	2,697

Note(s): Table 3 shows the regression results of the effect of financial literacy on vulnerability and digital financial inclusion using MMQR estimation. The dependant variables for the analysis are measures of vulnerability (columns 1 and 2) and digital financial inclusion (columns 3 and 4). These are regressed on selected explanatory variables: The weak financial literacy, high financial literate, employment status, location, and educational level. The parameters are estimated with the small sample adjusted standard errors in parenthesis. ***, **, and * indicate statistical significance at the 1%, 5% and 10% level respectively. The regression spans quantile 1 to 9 with results from location and scale representing the average effects and the dispersions respectively

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