Impact of Knowledge and Financial Personality Traits on Financial Behavior – A Study of Middle-Class Families in Pakistan


  • Ifra Khan Research Scholar, Karachi University Business School
  • Dr. Danish Ahmed Siddique Associate Professor and Chairman, Karachi University Business School


Objective financial knowledge, Subjective financial knowledge, Numeric Ability, Cognitive reflection, self-control, self-efficacy


Pakistan, like many other third world agrarian countries. is in the process of strengthening itself on social, political, economic and financial fronts. Role of educated individuals belonging to middle class families and their importance in this effort cannot be denied. Following the path of many other financial researchers from different parts of the world, this study is also an effort to study the financial Behavior of such individuals and to assess the impact of various cognitive and contextual factors on their Behavior. Various financial personality traits and attributes are included in the model to study their direct and mediating impact on individuals’ financial Behavior. A sample of 400 representative individuals was drawn and data was collected to assess the impact of various factors. Our results show that along with objective and subjective financial knowledge, which make a strong impact on financial Behaviors, the other financial personality traits like numeric ability, cognitive reflection, self-control and self-efficacy also very significantly impact the financial Behavior. The mediating impact of financial anxiety and financial security on the financial Behavior is also studied. Since all these variables were taken from previous studies already carried out in different parts of the world so results are more in line with those of previous studies and no significant exception was noticed except for the difference in strength and intensity of their impact.