The Regression Analysis of Individual Financial Performance: Evidence from Croatia

Vlasta Bahovec 1 , Dajana Barbić 1 ,  and Irena Palić 1
  • 1 Faculty of Economics and Business, University of Zagreb, Croatia


Background: A large body of empirical literature indicates that gender and financial literacy are significant determinants of individual financial performance.

Objectives: The purpose of this paper is to recognize the impact of the variable financial literacy and the variable gender on the variation of the financial performance using the regression analysis.

Methods/Approach: The survey was conducted using the systematically chosen random sample of Croatian financial consumers. The cross section linear regression model is estimated in order to assess how gender as a dummy variable and financial literacy as an ordinal categorical variable impact financial performance.

Results: The results indicate that the average value of financial performance for men is higher than the average value of financial performance for women at the same financial literacy level. Furthermore, a higher level of financially literacy is related to a higher level of financial performance.

Conclusions: Both gender and financial literacy have a statistically significant impact on individual financial performance. Increasing financial literacy and understanding gender differences in terms of financial literacy and financial well-being should be of interest to financial educators in their struggles to improve financial situation of citizens and for educators to create financial education programs intended for men and women.

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