Validating Islamic Financial Literacy Instruments among MUM Generation: Rasch Analysis Approach

Authors

  • Purnomo M Antara Universiti Teknologi MARA Malaysia
  • Rosidah Musa Universiti Teknologi MARA Malaysia

DOI:

https://doi.org/10.33736/ijbs.3315.2020

Keywords:

Islamic financial literacy, Halal, MUM generation, Rasch Analysis

Abstract

Islamic financial literacy is an emerging term which is increasingly used in research and policy. Though a study in this area is growing, there is a lack of an accepted method to measure Islamic financial literacy. This study aims to develop a valid and reliable instrument to access Islamic financial literacy among MUM (Muslim Urban Millennial) generations using Rasch analysis. A comprehensive literature review and a qualitative study were initially performed to identify the construct of Islamic financial literacy. A total of 109 respondents from MUM generation completed the 18-item instrument with multiple-choice questions. However, only 85 final sample out of 109 data measured after eliminating the person with the extreme score. The dimensionality of the items was evaluated using WINSTEPS 3.73. Results show that the measurements model is highly reliable with a reliability alpha of 0.87 and 0.96 for person and item, respectively. There is also six misfit item that needs to be reviewed or removed. Differential Item Functioning (DIF) analysis shows that three items have a bias between gender. Overall, the developed Islamic financial literacy scale is a valid
and reliable instrument to measure Islamic financial literacy in MUM generation. This measure lays a solid empirical and theoretical foundation for future research in Islamic financial literacy among the MUM generation.

References

Andrich, D. (1988). Rasch Models for Measurement. Beverly Hill: Sage University Paper Series on Quantitative Applications in Social Science.

Antara, P. M., Musa, R., & Hassan, F. (2017). Conceptualisation and Operationalisation of Islamic Financial Literacy Scale. Pertanika Journal of Social Sciences & Humanities, 25(S), 251-260.

Arofah, A. A., Purwaningsih, Y., & Indriayu, M. (2018). Financial Literacy, Materialism and Financial Behavior. International Journal of Multicultural and Multireligious Understanding, 5(4), 370-378.

Aryadoust, V., Goh, C. C. M., & Kim, L. O. (2011). An Investigation of Differential Item Functioning in the MELAB Listening Test. Language Assessment Quarterly, 8(4), 361-385.

Azrilah, A. A., Mohd Saidfudin, M., Faridah, M. I., Mohd Zaidi, O., & Azami, Z., (2013). Insights into Engineering Education Learning Outcome’s Assessment with Rasch Model. Research Journal of Applied Sciences, Engineering and Technology, 6(19), 3520-3526.

Baghaei, P. (2011). Validation of a Multiple-Choice English Vocabulary Test with the Rasch Model. Journal of Language Teaching and Research, 2(5), 1052-1060.

Bhabha, J. I., Khan, S., Qureshi, Q. A., Naeem, A, & Khan, I. (2014). Impact of Financial Literacy on Saving-Investment Behavior of Working Women in the Developing Countries. Research Journal of Finance and Accounting, 13(5), 118-122.

Bond, T. G., & Fox, C. M. (2007). Applying the Rasch Model: Fundamental Measurement in the Human Science (2nd ed.). Mahwah, NJ: Lawrence Erlbaum Associates.

Linacre, J. M. (2011). A User's guide to WINSTEPS Ministeps: Rasch-Model Computer Program. Program Manual 3.73.

Lusardi, A. (2008). Financial Literacy: An Essential Tool for Informed Consumer Choice? NBER Working Paper No 14084. Retrieved from http://www.nber.org/papers/w14084.pdf

Moreno, F. M., Lafuente, J. G., Carreon, F. A., & Moreno, S. M. (2017). The Characterisation of the Millennials and Their Buying Behavior. International Journal of Marketing Studies, 9(5), 135-144.

Rasch, G. (1960). Probabilistic Models for Some Intelligence and Attainment Tests. Copenhagen: Danish Institute for Educational Research.

Rossi Ferrario, S., Panzeri, A., Anselmi, P., & Vidotto, G. (2019). Development and Psychometric Properties of a Short Form of the Illness Denial Questionnaire. Psychology Research and Behavior Management, 12, 727-739.

Saidi, S. S., & Siew, N. M. (2019). Reliability and Validity Analysis of Statistical Reasoning Test Survey Instrument using the Rasch Measurement Model. International Electronic Journal of Mathematics Education, 14(3), 535-546.

Salehudin, I. (2010). Halal Literacy. A Concept Exploration and Measurement Validation. ASEAN Marketing Journal, 2(1), 1-12.

Sergie, M. A. (2014). The Rise of Islamic Finance. Council on Foreign Relations. Retrieved from https://www.cfr.org/backgrounder/rise-islamic-finance

Shabbir M. S., Rehman A. K., & Akhtar T. (2016). The Role of Islamic Leading Organisations for the Promotion of Islamic Finance in Western Countries. Journal of Internet Banking and Commerce, 21, 157

Smith, E. V., Lawless, K. A., Curda, L., & Curda, S. (1999). Measuring change in efficacy. Popular Measurement, 2(1), 31-33.

Wright, B. D., & Stone, M. H. (1979). Best Test Design Rasch Measurement. Chicago, IL: Mesa Press.

Xiao, J. J., Ahn, S. Y., Serido, J., & Shim, S. (2014). Earlier Financial Literacy and Later Financial Behaviour of College Students. International Journal of Consumer Studies, 38(6), 593-601.

Downloads

Published

2020-12-07

How to Cite

Purnomo M Antara, & Rosidah Musa. (2020). Validating Islamic Financial Literacy Instruments among MUM Generation: Rasch Analysis Approach. International Journal of Business and Society, 21(3), 1113–1121. https://doi.org/10.33736/ijbs.3315.2020