In 2014 S&P’s Ratings Services worked with Gallup, Inc., the World Bank Development Research Group, and the Global Financial Literacy Excellence Center on the S&P Global FinLit Survey – the largest, most comprehensive global measurement of financial literacy.
The S&P Global FinLit Survey probes four basic financial concepts: risk diversification, inflation, numeracy, and compound interest. Based on interviews with more than 150,000 adults across 148 countries, the survey gives researchers, policy makers, and practitioners a unique, first-of-its kind, and in-depth look at financial literacy across the globe.
The financial literacy questions address five basic dimensions of financial comprehension on the individual level (correct answers in bold):
- Risk Diversification
Suppose you have some money. Is it safer to put your money into one business or investment, or to put your money into multiple businesses or investments? [one business or investment; multiple businesses or investments; don’t know; refused to answer]
Suppose over the next 10 years the prices of the things you buy double. If your income also doubles, will you be able to buy less than you can buy today, the same as you can buy today, or more than you can buy today? [less; the same; more; don’t know; refused to answer]
- Numeracy (Interest)
Suppose you need to borrow 100 US dollars. Which is the lower amount to pay back: 105 US dollars or 100 US dollars plus three percent? [105 US dollars; 100 US dollars plus three percent; don’t know; refused to answer]
- Compound Interest
Suppose you put money in the bank for two years and the bank agrees to add 15 percent per year to your account. Will the bank add more money to your account the second year than it did the first year, or will it add the same amount of money both years? [more; the same; don’t know; refused to answer]
Suppose you had 100 US dollars in a savings account and the bank adds 10 percent per year to the account. How much money would you have in the account after five years if you did not remove any money from the account? [more than 150 dollars; exactly 150 dollars; less than 150 dollars; don’t know; refused to answer]
Surveys were conducted face-to-face in economies where telephone coverage represents less than 80 percent of the population or is the customary methodology. In most economies the fieldwork was completed in two to four weeks. In economies where face-to-face surveys were conducted, the first stage of sampling was the identification of primary sampling units. These units are stratified by population size, geography, or both, and clustering is achieved through one or more stages of sampling. Where population information was available, sample selection was based on probabilities proportional to population size; otherwise, simple random sampling was used. Random route procedures were used to select sampled households. Unless an outright refusal occurred, interviewers made up to three attempts to survey the sampled household. To increase the probability of contact and completion, attempts were made at different times of the day and, where possible, on different days. If an interview could not be obtained at the initial sampled household, a simple substitution method was used. Respondents were randomly selected within the selected households by means of the Kish grid. In economies where cultural restrictions dictate gender matching, respondents were randomly selected through the Kish grid from among all eligible adults of the interviewer’s gender.
In economies where telephone interviewing was employed, random digit dialing or a nationally representative list of phone numbers was used. In most economies where cell phone penetration is high, a dual sampling frame was used. Random selection of respondents was achieved by using either the latest birthday or Kish grid method. At least three attempts were made to reach a person in each household, spread over different days and times of day.
Data weighting was used to ensure a nationally representative sample for each economy. Final weights consisted of the base sampling weight, which corrects for unequal probability of selection based on household size, and the poststratification weight, which corrects for sampling and nonresponse error. Poststratification weights use economy-level population statistics on gender and age and, where reliable data are available, education or socioeconomic status.