Farmers' Financial Literacy-Scale Development and Linkages to Accounting Practices and Financial Outcomes

Abstract

This study investigates the financial literacy (FL) of Swedish farmers, its linkages to farmer characteristics, management accounting practices and farm outcomes by surveying Swedish Farm Accountancy Data Network farmers. Using item response theory, we expand the existing FL measurement specifically to the farming context, assess measurement items and compare shorter and longer scales of FL. Our findings indicate high levels of FL among respondents. FL is positively associated with more extensive management accounting practices, greater farm profitability and lower cost of debt, independent of other farmer characteristics, including education, numeracy, need for cognition, and money vigilance. The findings suggest the relevance of FL as a farmer characteristic for both practices and outcomes, even when included through its shortest and more established measurement scale.

Keywords

accounting; cost of debt; farmers; financial literacy; profitability

Published in

Agribusiness : An International Journal
2024
Publisher: WILEY

SLU Authors

• Gottlieb, Uliana

  • Department of Economics, Swedish University of Agricultural Sciences
    

• Hansson, Helena

  • Department of Economics, Swedish University of Agricultural Sciences
    

UKÄ Subject classification

Business Administration

Publication identifier

• DOI: https://doi.org/10.1002/agr.21986

Permanent link to this page (URI)

https://res.slu.se/id/publ/133135