Financial behavior, confidence, risk preferences

This study investigates determinants of financial behavior (FB) of uni-versity students at a university in South Africa. It examines whether financialbehavior, confidence, time preferences, risk preferences and financial literacy per-ceptions of university students differ by financial literacy level. Data were gatheredvia a questionnaire that included personal information, FB, financial perceptions andfinancial knowledge responses as well as a multiple price list (MPL) risk preferencesand time preferences experiment tasks. A convenient total sample of 191 students(females = 53%) participated in the study. A t-test analysis showed that FB, riskpreferences, confidence levels, time preferences and financial literacy perceptionsof university students significantly differed by financial literacy level. Our resultsshow that university students with low financial literacy levels are more overconfi-dent, risk loving and impatient; such FB is synonymous with major causes offinancial crises across the world. An OLS regression model analysis showed that therisk preferences index, financial literacy perception index and confidence signifi-cantly influenced the FB of categorized university students. The risk preferenceindex significantly influenced debt FB of categorized university students. In order to understand the FB of university students, one should take cognizance of theirpreferences, financial knowledge, confidence and personal characteristics.