The illiteracy pride and the financial prejudice

After the economic crisis of 2008-2009, the increase of investor Financial Literacy (FL) has become a public policy objective to improve welfare through better decision making. The aim of this paper is to describe the impact of FL on investors’ choices. We present a theoretical approach that will require – in a future – an application to test the model proposed. During the last few decades, the attention to Financial Literacy has produced a growing interest to explore the link between Financial Literacy and Financial Behaviour. However, the first consequence of this attention is that there is no clear definition of Financial Literacy. Moreover, the review of the literature shows a fragmentation, and this has prevented the formulation of a unified point of view on FL and investors’ behaviour relation. For these reasons, this topic requires new and deeper studies. In this paper, we propose a theoretical model to study if financial education and financial literacy influence the diversification strategies in financial choices. For this reason, we apply a multi-criteria analysis that can integrate the various aspects into a uniform evaluation. In particular, our model implements the AHP method. Following the model suggested by Rossi et al (2020), for evaluating the best investment choice we analyse three criteria: the return of the stock market, the performance of government bonds and the calendar effects in the financial markets. Then, in order to test if Financial Education have a positive impact on decision-making investors’ process, we will submit a questionnaire to two groups of financial operators: a financial illiterate operators group (illiterate classroom) and a financial literate operators group (literacy classroom). Applying the same AHP model to both groups of operators may allow us to verify the influence of financial education and/or financial literacy on the investment choice