The application of ordinal logistic regression on financial literacy^cDian Anggun Kusumaningtyas

Abstract

Students with limited knowledge on financial literacy will obviously face problems in managing their finance. Financial literacy is considered as an ability to take financial decisions in the present and future.It will help people to avoid Hedonic Treadmill as well. Hedonic Treadmill is known asa tendency of consumption more than they needdue to human greed. The research aimsare to provide literacy index of IPB students and identify related factors to the index. Stratified Random Sample was implemented to obtain primary data. The population was divided into two groups,students of Faculty of Economics and Management and students of other faculties. Ordinal Logistic Regression was used to analyze the data which were randomly selected from each group.The result shows that most students have low understanding on financial literacy. The faculty, year of entry to IPB, and parental income have significant effects on the financial literacy (p-value lower than 0.05). Financial literacy and each application are suggested to be included to curriculum since they are important in helping managing students finance in the present and future time.

Students with limited knowledge on financial literacy will obviously face problems in managing their finance. Financial literacy is considered as an ability to take financial decisions in the present and future.It will help people to avoid Hedonic Treadmill as well. Hedonic Treadmill is known asa tendency of consumption more than they needdue to human greed. The research aimsare to provide literacy index of IPB students and identify related factors to the index. Stratified Random Sample was implemented to obtain primary data. The population was divided into two groups,students of Faculty of Economics and Management and students of other faculties. Ordinal Logistic Regression was used to analyze the data which were randomly selected from each group.The result shows that most students have low understanding on financial literacy. The faculty, year of entry to IPB, and parental income have significant effects on the financial literacy (p-value lower than 0.05). Financial literacy and each application are suggested to be included to curriculum since they are important in helping managing students finance in the present and future time.