Determinants of the financial wellbeing of individuals in an emerging economy: an empirical study
International Journal of Bank Marketing
ISSN: 0265-2323
Article publication date: 21 March 2023
Issue publication date: 23 May 2023
Abstract
Purpose
The current study aims to identify the impact of financial literacy, financial risk-tolerance, financial socialization, financial stress, socio-demographic factors and financial behavior on the individual financial wellbeing residing in India's National Capital Region (NCR) region. Understanding financial wellbeing is crucial as it helps individuals understand personal finance better and develop a more favorable financial attitude. The information can depict individuals' financial skills, knowledge and attitudes toward achieving financial wellbeing in emerging economies.
Design/methodology/approach
Through self-administered survey questionnaires, data are obtained using convenience sampling from 420 (394) respondents regarding individual financial wellbeing levels in India. The survey responses were collected between May 2022 and July 2022. The authors use the “partial least squares structural equation modeling” (PLS-SEM) technique to test the research hypotheses.
Findings
The present study's outcome confirms that five determinants, such as financial literacy, financial risk-tolerance, financial socialization, financial stress and socio-demographic factors, significantly influence the financial behavior of individuals. Further, financial behavior, financial literacy, financial risk-tolerance and financial socialization significantly influence financial wellbeing. However, financial stress and socio-demographic factors have statistically insignificant impacts on financial wellbeing.
Originality/value
The present study is exclusive in which an effort is being made to acquire relative importance on financial behavior and an individual's financial wellbeing. The present paper will help the government, financial services providers, and policymakers in offering innovative economic schemes and designing policies that may enhance the financial wellbeing of individuals. Finally, this article provides the road map for future research in this field.
Keywords
Citation
Kumar, J., Rani, V., Rani, G. and Sarker, T. (2023), "Determinants of the financial wellbeing of individuals in an emerging economy: an empirical study", International Journal of Bank Marketing, Vol. 41 No. 4, pp. 860-881. https://doi.org/10.1108/IJBM-10-2022-0475
Publisher
:Emerald Publishing Limited
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