Financial Literacy and Financial Risk Tolerance of Lottery Gamblers in Thailand
DOI:
https://doi.org/10.33736/ijbs.4830.2022Keywords:
Financial literacy, financial literacy confidence, financial risk tolerance, lottery gambling, informal laborAbstract
This paper investigates the impacts of financial literacy level, financial risk tolerance and demographic characteristics on gambling behavior of informal laborers. The data were analyzed by Multivariate Analysis of Variance and Multinomial Logistic Regression. The total of 995 participants used in this research were collected by Multi-Stage Randomization from the informal laborers in Southern Thailand. The empirical analysis revealed that the financial literacy confidence, the risk tolerance, and the demographic characteristics were significant determinants of the gambler’s behavior. The older the gamblers were, the more they got addicted to gambling. Also, the more the people perceived that they have a high level of financial literacy, the more they would gamble. However, it was found that the female laborers were more frequent gamblers than the males. Thus, agencies responsible for supervising the financial education should be aware of the expected outcomes, not only focusing on actual financial literacy, but also supporting the individuals to achieve a healthy level of financial literacy confidence.
References
Afifi, T. O., Cox, B. J., Martens, P. J., Sareen, J., & Enns, M. W. (2010). Demographic and social variables associated with problem gambling among men and women in Canada. Psychiatry research, 178(2), 395-400. https://doi.org/10.1016/j.psychres.2009.10.003
Albers, N., & Hübl, L. (1997). Gambling market and individual patterns of gambling in Germany. Journal of Gambling Studies, 13(2), 125-144. https://doi.org/10.1023/A:1024999217889
Allgood, S., & Walstad, W. B. (2016). The effects of perceived and actual financial literacy on financial behaviors. Economic inquiry, 54(1), 675-697. https://doi.org/10.1111/ecin.12255
Amonhaemanon, D., & Isaramalai, S. (2020). Boosting financial literacy: The roles to enhance quality of life. ABAC Journal, 40(1), 85-108.
Amonhaemanon, D., & Vora-Sitta, P. (2020). From financial literacy to financial capability: A preliminary study of difference generations in informal labor market. The Journal of Asian Finance, Economics, and Business, 7(12), 355-363. https://doi.org/10.13106/jafeb.2020.vol7.no12.355
Ariyabuddhiphongs, V. (2011). Lottery gambling: A review. Journal of Gambling Studies, 27(1), 15-33. https://doi.org/10.1007/s10899-010-9194-0
Asaad, C. T. (2015). Financial literacy and financial behavior: Assessing knowledge and confidence. Financial Services Review, 24(2), 101-117.
Atkinson, A., & Messy, F. A. (2012). Measuring financial literacy: Results of the OECD/International Network on Financial Education (INFE) pilot study (OECD Working Papers on Finance, Insurance and Private Pensions No. 15). https://www.oecd-ilibrary.org/finance-and-investment/measuring-financial-literacy_5k9csfs90fr4-en
Bakar, M. Z. A., & Bakar, S. A. (2020). Prudent financial management practices among Malaysian youth: The moderating roles of financial education. The Journal of Asian Finance, Economics and Business, 7(6), 525-535. https://doi.org/10.13106/jafeb.2020.vol7.no6.525
Bank of Thailand. (2016). The report of the financial literacy survey in Thailand. https://www.1213.or.th/th/aboutfcc/knownfcc/Documents/2013%20ThaiFLSurvey.pdf
Bayar, Y., Sezgin, H. F., Öztürk, Ö. F., & Şaşmaz, M. Ü. (2020). Financial literacy and financial risk tolerance of individual investors: Multinomial logistic regression approach. Sage Open, 10(3), 1-11. https://doi.org/10.1177/2158244020945717
Beckert, J., & Lutter, M. (2013). Why the poor play the lottery: Sociological approaches to explaining class-based lottery play. Sociology, 47(6), 1152-1170. https://doi.org/10.1177/0038038512457854
Bruyneel, S., Dewitte, S., Franses, P. H., & Dekimpe, M. G. (2005). Why consumers buy lottery tickets when the sun goes down on them. The depleting nature of weather-induced bad moods (ERIM Report Series Reference No. ERS-2005-045-MKT). https://ssrn.com/abst ract=870245
Bunthiam, T. (2007). Factors affecting the buying behavior of lottery in Khon Kaen Province. [Unpublished master thesis]. Khon Kaen University.
Burger, M. J., Hendriks, M., Pleeging, E., & Van der Zwan, P. W. (2016). The silver linings of lottery play: Motivation and subjective well-being of British lottery participants. Applied Economics Letters, 23(18), 1312-1316. https://doi.org/10.1080/13504851.2016.1153783
Chaiphat, C. (2019). Improving financial literacy of undergraduate students with supplementary financial lessons: A case of practical economics for daily life. TEM Journal, 8(2), 492-497.
Chotewattanakul, P., Sharpe, K., & Chand, S. (2019). The drivers of household indebtedness: Evidence from Thailand. Southeast Asian Journal of Economics, 7(1), 1-40.
Clotfelter, C. T., & Cook, P. J. (1990). On the economics of state lotteries. Journal of Economic Perspectives, 4(4), 105-119. https://doi.org/10.1257/jep.4.4.105
Clotfelter, C., Cook, P. J., Edell, J. A., & Moore, M. (1999). State lotteries at the turn of the century: Report to the National Gambling Impact Study Commission. National Gambling Impact Study Commission. https://dukespace.lib.duke.edu/dspace/bitstream/h andle/10161/7548/lottrep.pdf
Cunningham-Williams, R. M., Grucza, R. A., Cottler, L. B., Womack, S. B., Books, S. J., Przybeck, T. R., ... & Cloninger, C. R. (2005). Prevalence and predictors of pathological gambling: results from the St. Louis personality, health and lifestyle (SLPHL) study. Journal of Psychiatric Research, 39(4), 377-390. https://doi.org/10.1016/j.jpsychires.2004.09.002
Dixey, R., & Talbot, M. (1982). Women, leisure and bingo. Trinity & All Saints' College.
Duasa, J., & Yusof, S. A. (2013). Determinants of risk tolerance on financial asset ownership: A case of Malaysia. International Journal of Business & Society, 14(1), 1-16.
Felsher, J. R., Derevensky, J. L., & Gupta, R. (2003). Parental influences and social modelling of youth lottery participation. Journal of Community & Applied Social Psychology, 13(5), 361-377. https://doi.org/10.1002/casp.738
Fisher, P. J., & Yao, R. (2017). Gender differences in financial risk tolerance. Journal of Economic Psychology, 61(C), 191-202. https://doi.org/10.1016/j.joep.2017.03.006
Friedman, M., & Savage, L. J. (1948). The utility analysis of choices involving risk. Journal of Political Economy, 56(4), 279-304. https://doi.org/10.1086/256692
Frijns, B., Koellen, E., & Lehnert, T. (2008). On the determinants of portfolio choice. Journal of Economic Behavior and Organization, 66(2), 373-386. https://doi.org/10.1016/j.jebo.2006.04.004
Garrett, T. A., & Sobel, R. S. (1999). Gamblers favor skewness, not risk: Further evidence from United States' lottery games. Economics Letters, 63(1), 85-90. https://doi.org/10.1016/S0165-1765(99)00012-9
Government Lottery Office. (2015). Statistic income send to National income for year 2015. https://www.glo.or.th/about/performance/revenue-export
Grable, J., Lytton, R., & O'Neill, B. (2004). Projection bias and financial risk tolerance. The Journal of Behavioral Finance, 5(3), 142-147. https://doi.org/10.1207/s15427579jpfm0503_2
Grable, J., & Lytton, R. H. (1999). Financial risk tolerance revisited: The development of a risk assessment instrument. Financial Services Review, 8(3), 163-181. https://doi.org/10.1016/S1057-0810(99)00041-4
Grable, J. E. (2008). Risk tolerance. In J. X. Jing (Ed.), Handbook of Consumer Finance Research (pp. 3-19). Springer. https://doi.org/10.1007/978-0-387-75734-6_1
Grable, J. E. (2016). Financial risk tolerance. In In J. X. Jing (Ed.), Handbook of consumer finance research (2nd ed., pp. 19-31). Springer. https://doi.org/10.1007/978-3-319-28887-1_2
Grable, J. E., & Joo, S. H. (2004). Environmental and biophysical factors associated with financial risk tolerance. Journal of Financial Counseling and Planning, 15(1), 73-82.
Grable, J. E., & Roszkowski, M. J. (2008). The influence of mood on the willingness to take financial risks. Journal of Risk Research, 11(7), 905-923. https://doi.org/10.1080/13669870802090390
Griffiths, M., & Wood, R. T. (2000). Risk factors in adolescence: The case of gambling, videogame playing, and the Internet. Journal of gambling studies, 16(2), 199-225. https://doi.org/10.1023/A:1009433014881
Grohmann, A. (2018). Financial literacy and financial behavior: Evidence from the emerging Asian middle class. Pacific-Basin Finance Journal, 48(C), 129-143. https://doi.org/10.1016/j.pacfin.2018.01.007
Gruenwald, H., & Chatterji, S. D. (2016). Finance and banking behavior patterns of Thai generation Y. Proceedings of the 5th Burapha University International Conference 2016, 622-634.
Gupta, R., & Derevensky, J. L. (1998). Adolescent gambling behavior: A prevalence study and examination of the correlates associated with problem gambling. Journal of Gambling Studies, 14(4), 319-345. https://doi.org/10.1023/A:1023068925328
Halicka, Z., & Krawczyk, M. (2014). Happy-go-lucky. Positive emotions boost demand for lotto (University of Warsaw, Faculty of Economic Sciences Working Paper No. 9/2014 (126)). https://www.wne.uw.edu.pl/application/files/7816/3579/0905/WNE_WP126_20 14.pdf
Hallahan, T. A., Faff, R. W., & McKenzie, M. D. (2004). An empirical investigation of personal financial risk tolerance. Financial Services Review, 13(1), 57-78.
Hung, A., Parker, A. M., & Yoong, J. (2009). Defining and measuring financial literacy (RAND Labor and Population Working Paper No. WR-708). https://www.rand.org/content/dam/ rand/pubs/working_papers/2009/RAND_WR708.pdf
Kamnualsilp, P., Wongthanawasu, S., & Suthipongpracha, T. (2014). Gambling situation in Thailand: An analysis of social policy. Phra Dharmakhan Printing House.
Kannadhasan, M. (2015). Retail investors' financial risk tolerance and their risk-taking behaviour: The role of demographics as differentiating and classifying factors. IIMB Management Review, 27(3), 175-184. https://doi.org/10.1016/j.iimb.2015.06.004
Kaplan, H. R. (1988). Gambling among lottery winners: Before and after the big score. Journal of Gambling Behavior, 4(3), 171-182. https://doi.org/10.1007/BF01018330
Kempson, E., Collard, S., & Moore, N. (2006). Measuring financial capability: An exploratory study for the Financial Services Authority. In European Credit Research Institute (Ed.), Consumer Financial Capability: Empowering European consumers (pp. 39-76). European Credit Research Institute.
Lang, K. B., & Omori, M. (2009). Can demographic variables predict lottery and pari-mutuel losses? An empirical investigation. Journal of Gambling Studies, 25(2), 171-183. https://doi.org/10.1007/s10899-009-9122-3
Lee, C. H., Dyson, T., Park., M., Handy, C., & Reynolds, M. B. (2015). State government finances summary: 2013. United States Census Bureau, United States Department of Commerce. https://www.census.gov/library/publications/2015/econ/g13-asfin.html
Lusardi, A. (2012). Numeracy, financial literacy, and financial decision-making (National Bureau of Economic Research Working Paper No. 17821). https://www.nber.org/system /files/working_papers/w17821/w17821.pdf https://doi.org/10.3386/w17821
Lusardi, A., & Mitchell, O. S. (2007). Financial literacy and retirement planning: New evidence from the Rand American Life Panel (Michigan Retirement Research Center Research Paper No. 157). http://mrdrc.isr.umich.edu/publications/Papers/pdf/wp157.pdf https://doi.org/10.2139/ssrn.1095869
Mahdzan, N. S., Mohd-Any, A. A., & Chan, M. K. (2017). The influence of financial literacy, risk aversion and expectations on retirement planning and portfolio allocation in Malaysia. Gadjah Mada International Journal of Business, 19(3), 267-288. https://doi.org/10.22146/gamaijb.24441
McCannon, B. C., Asaad, C. T., & Wilson, M. (2016). Financial competence, overconfidence, and trusting investments: Results from an experiment. Journal of Economics and Finance, 40(3), 590-606. https://doi.org/10.1007/s12197-015-9328-4
McConkey, C. W., & Warren, W. E. (1987). Psychographic and demographic profiles of state lottery ticket purchasers. Journal of Consumer Affairs, 21(2), 314-327. https://doi.org/10.1111/j.1745-6606.1987.tb00205.x
Meeboon, T. (2003). Factors Affecting Gambling in Illegal Lottery in Bangkok Metropolis [Unpublished master thesis]. Chulalongkorn University.
National Statistical Office (NSO). (2017). The informal employment survey 2017. Labor Statistics Group. Social Statistics Division. statbbi.nso.go.th/staticreport/page/sector/th/0 2.aspx
Noppanun, W. (2011). The underground lottery economy: A view of changing in the Thai social economy structure through gambling business. Office of the Health Promotion Foundation, Thai Health Promotion Foundation. http://www.gamblingstudy-th.org/imga dmins/research_file/gambling_research_file-2012-03-23_14-25-31.pdf
Pravichai, S., & Ariyabuddhiphongs, V. (2015). Superstitious beliefs and problem gambling among Thai lottery gamblers: The mediation effects of number search and gambling intensity. Journal of Gambling Studies, 31(4), 1633-1649. https://doi.org/10.1007/s10899-014-9517-7
Pinjisakikool, T. (2017). The effect of personality traits on households' financial literacy. Citizenship, Social and Economics Education, 16(1), 39-51. https://doi.org/10.1177/2047173417690005
Piriyarangsan, S., Chaipong, Y., Gensaku, U., Treerat, N., Phrommontri, W., Wongyeekul, P., & Wongsinsirikul, W. (2003). The Gambling Economy:Policy Options. Government Lottery Office.
Piriyarangsan, S., Sonsuphap, R., & Kesapradi, B. (2014). The study and research of the Thai Lottery for Development: knowledge, conceptual framework and organization development approach. Government Lottery Office.
Pongpracha, C. (2015). Social dimension of the behaviour of playing underground lottery in Thailand. Journal of Local Administration, 8(4), 64-75.
Rahmawati, S., Agustiningsih, S. W., & Setiany, E. (2015). The effect of earnings management with special item to investment decision: empirical study at manufacture firm listed in Indonesia Stock Exchange 2008 - 2010. International Journal of Monetary Economics and Finance, 8(2), 111-125. https://doi.org/10.1504/IJMEF.2015.070777
Research Centre for Social and Business Development (SAB). (2017). Study of the situation, behavior and impact of gambling in Thailand 2017. Gambling Problems Study Center vorChulalongkorn University. http://www.gamblingstudy-th.org/imgadmins/research_fil e/ebook-60-19-SAB-national.pdf
Research Centre for Social and Business Development (SAB). (2020). A study of the situation, behavior and impact of gambling in Thailand 2019: Important situations by province. Gambling Study Center Chulalongkorn University. http://www.gamblingstudy-th.org/imgadmins/research_file/2562-05-SABProvincial%20Report_Gambling%202019 _Final%20_09.03.2020.pdf
Rogers, P., & Webley, P. (2001). "It could be us!": Cognitive and social psychological factors in UK National Lottery play. Applied Psychology, 50(1), 181-199. https://doi.org/10.1111/1464-0597.00053
Sharma, D. R., Chalise, M., & Dangol, J. (2017). Risk tolerance behaviour of individual Nepalese investors. Global Management Review, 11(2), 63-70.
Snelbecker, G. E., Roszkowski, M. J., & Cutler, N. E. (1990). Investors' risk tolerance and return aspirations, and financial advisors' interpretations: A conceptual model and exploratory data. Journal of Behavioral Economics, 19(4), 377-393. https://doi.org/10.1016/0090-5720(90)90024-2
Sulaiman, E. K. (2012). An empirical analysis of financial risk tolerance and demographic features of individual investors. Procedia Economics and Finance, 2, 109-115. https://doi.org/10.1016/S2212-5671(12)00070-6
TMB Analytics. (2019, January 18). TMB Research Insight into Thai lottery behaviour. Lottery is a dream come true for millions of Thais. Thai Publica. https://thaipublica.org/2019/01 /tmb-lottary-research/
Van de Venter, G., Michayluk, D., & Davey, G. (2012). A longitudinal study of financial risk tolerance. Journal of Economic Psychology, 33(4), 794-800. https://doi.org/10.1016/j.joep.2012.03.001
Vora-Sitta, P. (2018). An evaluation of possibility in reshaping lottery money to long-term savings for the poor in outer Bangkok, Thailand. NIDA Development Journal, 58(1), 74-102.
Welte, J. W., Barnes, G. M., Wieczorek, W. F., Tidwell, M. C., & Parker, J. (2002). Gambling participation in the US-results from a national survey. Journal of Gambling Studies, 18(4), 313-337. https://doi.org/10.1023/A:1021019915591
Yong, H. N. A., & Tan, K. L. (2017). The influence of financial literacy towards risk tolerance. International Journal of Business And Society, 18(3), 469-484. https://doi.org/10.33736/ijbs.3139.2017
Zahirovic-Herbert, V., Gibler, K. M., & Chatterjee, S. (2016). Financial literacy, risky mortgages, and delinquency in the US during the financial crisis. International Journal of Housing Markets and Analysis, 9(2), 164-189. https://doi.org/10.1108/IJHMA-12-2014-0060
Downloads
Published
How to Cite
Issue
Section
License
Copyright Transfer Statement for Journal
1) In signing this statement, the author(s) grant UNIMAS Publisher an exclusive license to publish their original research papers. The author(s) also grant UNIMAS Publisher permission to reproduce, recreate, translate, extract or summarize, and to distribute and display in any forms, formats, and media. The author(s) can reuse their papers in their future printed work without first requiring permission from UNIMAS Publisher, provided that the author(s) acknowledge and reference publication in the Journal.
2) For open access articles, the author(s) agree that their articles published under UNIMAS Publisher are distributed under the terms of the CC-BY-NC-SA (Creative Commons Attribution-Non Commercial-Share Alike 4.0 International License) which permits unrestricted use, distribution, and reproduction in any medium, for non-commercial purposes, provided the original work of the author(s) is properly cited.
3) For subscription articles, the author(s) agree that UNIMAS Publisher holds copyright, or an exclusive license to publish. Readers or users may view, download, print, and copy the content, for academic purposes, subject to the following conditions of use: (a) any reuse of materials is subject to permission from UNIMAS Publisher; (b) archived materials may only be used for academic research; (c) archived materials may not be used for commercial purposes, which include but not limited to monetary compensation by means of sale, resale, license, transfer of copyright, loan, etc.; and (d) archived materials may not be re-published in any part, either in print or online.
4) The author(s) is/are responsible to ensure his or her or their submitted work is original and does not infringe any existing copyright, trademark, patent, statutory right, or propriety right of others. Corresponding author(s) has (have) obtained permission from all co-authors prior to submission to the journal. Upon submission of the manuscript, the author(s) agree that no similar work has been or will be submitted or published elsewhere in any language. If submitted manuscript includes materials from others, the authors have obtained the permission from the copyright owners.
5) In signing this statement, the author(s) declare(s) that the researches in which they have conducted are in compliance with the current laws of the respective country and UNIMAS Journal Publication Ethics Policy. Any experimentation or research involving human or the use of animal samples must obtain approval from Human or Animal Ethics Committee in their respective institutions. The author(s) agree and understand that UNIMAS Publisher is not responsible for any compensational claims or failure caused by the author(s) in fulfilling the above-mentioned requirements. The author(s) must accept the responsibility for releasing their materials upon request by Chief Editor or UNIMAS Publisher.
6) The author(s) should have participated sufficiently in the work and ensured the appropriateness of the content of the article. The author(s) should also agree that he or she has no commercial attachments (e.g. patent or license arrangement, equity interest, consultancies, etc.) that might pose any conflict of interest with the submitted manuscript. The author(s) also agree to make any relevant materials and data available upon request by the editor or UNIMAS Publisher.
