Celebrating Success: Prof Darren Duxbury

Congratulations to Prof Darren Duxbury and his co-authors R. Ranyard, S. McNair and G. Nicolini who recently had their paper titled: ‘An Item Response Theory Approach to Constructing and Evaluating Brief and In-depth Financial Literacy Scales’ accepted for publication by Journal of Consumer Affairs.

Abstract:

We applied Item Response Theory (IRT) to construct and evaluate new brief and in-depth financial literacy scales. A survey of a UK adult sample (N = 589) included 50 questions to assess knowledge about managing financial resources and competence in using personal finance-related information – including five widely used items, on interest rates – inflation, investment diversification, mortgages and bonds. IRT applied to a scale of these items identified some limitations, overcome via further iterations to construct a new brief scale with sound psychometric properties. IRT was then applied iteratively to our pool, resulting in an in-depth, 20-item scale, also psychometrically sound, covering four broad financial domains: everyday money transactions; the concept of money; borrowing; and saving and investment. Parallel 10-item sub-scales were also evaluated. The validity of the new scales was demonstrated by regression analyses which found that, controlling for demographic variables, financial literacy predicted key indicators of financial well-being.

The Journal of Consumer Affairs is a leading academic journal on financial literacy, including papers by world-leading academics in the area – e.g. Annamaria Lusardi, Olivia S. Mitchell, Sandra Huston, Wändi Bruine de Bruin.