Measuring financial literacy: a literature review

Purpose The purpose of this paper is to review the main methods used in the literature to measure financial literacy (FL) of individuals. Design/methodology/approach The paper begins by describing how the different items used to measure the FL level of individuals are constructed. Then, it focuses on how do researchers select the items. Finally, it reviews the different calculation methods used in the literature to assess the FL level. Findings FL as a concept is tough to define and measure. Several studies focus on the definition and the measure of this concept. Different items are used in the literature and are mostly related to the study topics. The used calculation methods differ across the different studies. Originality/value This paper sheds light on the principal methodologies used in the literature to measure FL. It highlights the relationship between the items' content areas and the studies' subjects. Thus, this paper suggests guidance for future studies on measuring methods of FL.