A proposal of a financial knowledge scale based on item response theory

Abstract

The evaluation of financial knowledge is still a controversial subject in the literature, and this work seeks to advance by proposing instruments for this evaluation. Based on the related literature, twenty-four questions were adapted in the initial instrument. Using Item Response Theory, a synthetic instrument was developed, with twelve questions that evaluate three levels of items: basic, intermediate and advanced. From the skill and anchor items scale, two smaller scales of nine and seven items were also derived for financial knowledge assessment. The scales proposed in this study innovate by differing from those commonly used in the literature, by considering not only the percentage of correct answers but also the parameters of the item that the individual answers correctly. The three scales have items from different levels of knowledge, allowing researchers, educators, and policymakers to choose which is the most appropriate to their objectives.