DETERMINANTS OF FINANCIAL BEHAVIOR AND FINANCIAL WELLBEING IN DISTRICT KOHAT

Abstract

The study proceeded with the objective to construct principal components for Financial Behavior (FB) and Financial Well Being (FW). Also, the study wants to find out the determinants of FB and FW in District Kohat. A survey comprises of different measures of FB, subjective FW, cognitive, non-cognitive, external determinants and demographic variables, was circulated among 306 individuals in District Kohat. Creating Principal Component for the determinants, OLS method was applied to estimate the stated relationships. Furthermore, GMM was applied to get the robust results. All the three types of determinants were monotonically associated with FB and boost it up. Financial literate and optimistic individuals feel less anxious and have better future security, while culturalism promotes financial stress in current financing. Also, the GMM results are in coherence to OLS estimates with little variations.