Financial knowledge among Iranian investors

• Published in: International journal of consumer studies 2019-11, Vol.43 (6), p.503-513
• Main Authors: Cude, Brenda J., Chatterjee, Swarn, Tavosi, Jamal
• Format: Article
• Language: English
• Subjects: Bans; Demography; financial knowledge; financial literacy; Interest rates; Investments; Investors; Iran; Islam; Islamic financing; Islamic law; Knowledge; Labor force; overconfidence in financial knowledge; Usury
• ISSN: 1470-6423; 1470-6431
• DOI: 10.1111/ijcs.12535

This research is the first to describe financial knowledge in the Islamic Republic of Iran. Data were collected from a convenience sample of investors in the Tehran Stock Exchange. The data were used to examine objective and subjective knowledge as well as overconfidence in one's financial knowledge. The results indicated that compared with other populations, Iranians did not perform well on either basic or advanced financial knowledge questions, especially when the questions dealt with interest rates. This is likely related to the Islamic law ban on usury‐based investing. Regression analysis indicated that demographic charactristics related to basic financial knowledge were income, labour force status and being a student. Demographic characteristics related to advanced financial knowledge were education, labour force status and age. Higher income and education reduced the odds of being overconfident about one's financial knowledge, while being a student and male increased the odds. The article concludes with recommendations about future research as well as building a national financial education strategy.