Abstract
The Survey of Consumer Finances (SCF) contains detailed U.S. household balance sheet information and is frequently used to study outcomes in household finance. There is no variable that explicitly measures financial sophistication in the SCF. We propose a factor score composed of four questions that can serve as a proxy of financial sophistication to correct a possible important omitted variable bias. Results using the sophistication factor show how controlling for financial sophistication provides a more precise estimate of the marginal effects of control variables such as education and race.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
