Valuing the Implementation of Financial Literacy Education

By Davis, Kimberlee; Durband, Dorothy Bagwell | Journal of Financial Counseling and Planning, January 1, 2008 | Go to article overview

Valuing the Implementation of Financial Literacy Education


Davis, Kimberlee, Durband, Dorothy Bagwell, Journal of Financial Counseling and Planning


Placing a monetary value on education is a complex task. A more difficult task is to determine at what monetary level individuals will support educational improvements. The contingent valuation method was used to estimate the value of the implementation of financial literacy education in Texas public schools. A Web-based survey was administered to 279 Texas Parent Teacher Association (PTA) members. Respondents reported being willing to pay additional property taxes for implementation of financial literacy education. Additional gambling venues and state sales tax proved to be acceptable revenue sources for added educational funding, whereas a state income tax proved to be the least preferred revenue source.

Key Words: contingent valuation, financial education, financial literacy

Introduction and Background

Alan Greenspan, former Chairman of the Board of Governors of the Federal Reserve System, identified financial education programs at the elementary and secondary school levels as necessary resources for consumers to achieve financial literacy. In a speech presented during an annual meeting of the Jump$tart Coalition for Personal Financial Literacy (Jump$tart), Greenspan stated that an understanding of financial issues is critical to the successful management of personal finances and instrumental in giving consumers the tools to make educated choices about financial products. He pointed out that such knowledge was necessary to enable consumers to protect themselves from abuses stemming from fraud and other illegal practices (Jump$tart, 2003). Ben Bernanke, current Chairman of the Board of Governors of the Federal Reserve System, stated that improving financial education is vital to the future of our economy and pronounced that "financially literate consumers make the financial marketplace work better, and they are better-informed citizens" (Bernanke, 2006).

In 1997, Bernheim, Garrett, and Maki documented that financial education mandates had a positive effect on personal financial management. For instance, they reported that asset accumulation amounts increased up to 1.5% later in life for those who received high school instruction in personal finance compared to those who did not receive instruction. Despite this important finding, a national survey of financial literacy among high school seniors conducted every other year since 1997 revealed only slight increases in already low scores in financial literacy (Jump$tart, 2004, 2006). One plausible explanation for these low scores may be American high schools' increased focus on high stakes testing as mandated by the national education legislation known as "No Child Left Behind" and college preparation. Courses with practical daily applications, such as financial literacy, have received less emphasis.

The lack of attention to financial literacy education in public high schools has an impact on consumers' ability to make sound financial decisions about present and future personal needs. Yet, measuring the benefits and costs of implementing new secondary courses to the core curriculum can be difficult. A technique of economic analysis called the contingent valuation method (Mitchell & Carson, 1989) has helped researchers obtain estimates of economic value of intangible, nonmarket goods or services. In this paper, the contingent valuation method is used to establish an estimate of the economic value placed on the implementation of the financial literacy educational curriculum in Texas public schools. This is the first known attempt to value financial literacy education using this method.

Literature Review

Status of Financial Literacy Education

In recent years, the Congress, State legislatures, and several governors have addressed the importance of financial education in public schools. As a result, financial education during high school is required by a number of states, including Alabama, Georgia, Idaho, Illinois, Kansas, Kentucky, Louisiana, Missouri, New York, North Carolina, Ohio, South Carolina, Texas, Utah, Virginia, and West Virginia (H. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Valuing the Implementation of Financial Literacy Education
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.