A spatial-temporal analysis of financial literacy in the U.S.

• • Use GIS-based spatial analytic methods and spatial Durbin model to study the spatial-temporal variation of financial literacy for the first time.

  • We find that the US states characterized by high financial literacy scores are shown to cluster in the central and northern part of the country over time.

  • We believe that regional financial literacy in the U.S. has significant spatial dependence and three regional factors are proved to have direct and indirect effects on financial literacy.

Have you ever looked at the distribution of financial literacy across different states? Are you residing in a financial literate or illiterate region?Most existing studies on the regional distribution of financial literacy overlook the cross-regional variation over time and its determinants. Therefore, we choose the spatial Durbin model with panel data to account for spatial dependence of financial literacy across the U.S. in 2009, 2012 and 2015. Our empirical findings support that the financial literacy of an individual state is associated with the characteristics of its neighbors. Specifically, we find support for the spatial spillover perspective in which per capita real GDP and unemployment rate are positively, and the Gini coefficient is negatively associated with the financial literacy in neighboring states.