Tagged: Financial Literacy

NTH :: Did you know financial stress may cause more physical pain?

Economic insecurity produces physical pain, reduces pain tolerance, and predicts over-the-counter painkiller consumption, according to scientists.
By: PTI | Washington | Published:Feb 24, 2016, 11:41 | Indian Express

NTH

People who feel that their financial outlook is shaky may actually experience more physical pain than those who feel economically secure, scientists — including one of Indian-origin — suggest.

The findings indicate that the link may be driven by feeling a lack of control over one’s life, researchers said.

“Overall, our findings reveal that it physically hurts to be economically insecure,” said lead study author Eileen Chou of the University of Virginia in US. “Results from six studies establish that economic insecurity produces physical pain, reduces pain tolerance, and predicts over-the-counter painkiller consumption,” Chou said.

The research stemmed from an observation of two co-occurring trends — increasing economic insecurity and increasing complaints of physical pain.

The researchers — including Bidhan Parmar of University of Virginia — hypothesised that these trends might actually be linked.

They said that feelings of economic insecurity would lead people to feel a lack of control in their lives, which would, in turn, activate psychological processes associated with anxiety, fear and stress. These psychological processes have been shown to share similar neural mechanisms to those underlying pain.

Data from a diverse consumer panel of 33,720 individuals showed that households in which both adults were unemployed spent 20 per cent more on over-the-counter painkillers in 2008, compared with households with at least one employed adult. An online study with 187 participants indicated that two measures of economic insecurity — participants’ own unemployment and state-level insecurity — were correlated with participants’ reports of pain. In another online study, participants who recalled a period of economic instability reported almost double the amount of physical pain than did participants who recalled an economically stable period.

This pattern of findings remained even after the researchers took other factors — including age, employment status, and negative emotion — into account.

Evidence from a lab-based study suggested that economic insecurity might be also linked with tolerance for pain. Student participants who were prompted to think about an uncertain job market showed a decrease in pain tolerance, measured by how long they could comfortably keep their hand in a bucket of ice water. Students who were prompted to think about entering a stable job market showed no change in pain tolerance.

The researchers found that the degree to which participants felt in control of their lives helped to account for the association between feelings of economic insecurity and reports of physical pain. “Individuals’ subjective interpretation of their own economic security has crucial consequences above and beyond those of objective economic status,” researchers said.

The study was published in the journal Psychological Science.

Source : http://goo.gl/zWBrjM

NTH :: 76% Indians not financially literate, says S&P survey

The survey found that 76 per cent of Indian adults do not adequately understand key financial concepts, including risk diversification, inflation and compounded interest.
By: PTI | New Delhi | December 15, 2015 3:23 PM | Financial Express

NTH

As much as 76 per cent of Indians do not understand key financial concepts like inflation and interest rate, lower than the worldwide average, a S&P Ratings Services survey said today.

Standard & Poor’s Ratings Services Global Financial Literacy Survey said in Asia, Singapore is home to the highest percentage of financially literate adults (59 per cent), followed by Hong Kong and Japan (both at 43 per cent). Less than a third of adults in China (28 per cent) are financially literate.

The survey found that 76 per cent of Indian adults do not adequately understand key financial concepts, including risk diversification, inflation and compounded interest.

“This is lower than the worldwide average of financial literacy, but roughly in line with other BRICS and South Asian nations,” it said. Also about 66 per cent of adults worldwide are not financially literate.

The material gap between men and women existed in almost every country. Worldwide, there is a five-point gender gap with 65 per cent of men not being financially literate compared with 70 per cent of women, the survey said.

In India, the gap was wider with 73 per cent of men and 80 per cent of women not being financially literate.

The survey also found out information about consumers’ familiarity with the financial products they utilise.

“While the array of financial products available in Asia continues to grow rapidly, the survey suggests that most consumers lack a general understanding of credit, compound interest and other key concepts,” the survey said.

Research increasingly shows that saving money is better for development than credit. Yet, just 14 per cent of adults in India save at a formal financial institution and their weak financial skills raise questions as to whether they’re getting the most out of their money, it added.

The survey interviewed more than 1.5 lakh adults across over 140 countries and tested individual’s knowledge on four basic financial concepts: numeracy, risk diversification, inflation, compound interest (saving and debt).

According to the survey, 75 per cent of Asian adults and in comparison, 57 per cent of adults in US and 67 per cent in UK are financially literate.

Only 14 per cent of Indian adults correctly answered the question on risk diversification. Conversely, 56 per cent answered the inflation question correctly.

About 39 per cent of adults who have a formal loan are financially literate, while more than a quarter (27 per cent) of formal borrowers were found to be not financially literate. Only about half of the participants (51 per cent) understood compound interest.

It said in India, 26 per cent of adults in the richest 60 per cent of households are financially literate compared to 20 per cent of adults in the poorest 40 per cent of households.

Worldwide, 36 per cent of adults in relatively richer households and 27 per cent of adults in relatively poorer households are financially literate.

Source : http://goo.gl/5mT4t7