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The study experimentally investigated the impact of financial literacy confidence (FLC) on financial risk preference confidence (FRPC) constructed from objective and subjective measures of financial literacy and risk preferences. Seven hundred seventy-two responses from 193 subjects were analyzed using the Random Effect Panel Regression (REPR) technique. The study reveals that FLC significantly impacts FRPC differently for overconfident and underconfident individuals. Specifically, the results show that an increase in FLC increases FRPC for overconfident individuals but decreases FRPC for underconfident individuals. Hierarchical Random Effect Panel regressions confirm that financial literacy residuals significantly impact risk preference residuals. The findings entail that cognitive abilities errors on subjective and objective measures of financial literacy correlate with risk preference errors on subjective and objective risk preference measures. Interestingly, the results show that increased financial literacy residuals lead to reduced risk preference residuals for individuals with high financial literacy. The results suggest that individuals with higher financial literacy can better align their subjective and objective measures of risk preferences. The study findings help to explain how FLC shapes the financial behavior of individuals making risky financial choices. The policy implications of these findings are that investing in financial literacy programs can assist individuals in making well-informed investment or saving decisions and can better manage financial risks. JEL Classification: D14, C19, D81, I22.

Purpose
This study aims to examine the impact of fiscal space and governance quality on inclusive growth in African countries.


Design/methodology/approach
In total, 28 African countries were analyzed from 2000 to 2020 using the generalized method of moment regression method. An inclusive growth index was developed using the principal component analysis (PCA) method. The PCA-derived index incorporates factors such as poverty, income inequality, economic participation and per capita income.


Findings
The main findings suggest that fiscal space availability (de facto fiscal space and fiscal balance) promotes inclusive growth. The study also showed that lagged inclusive growth, digitalization and governance indicators positively influence inclusive growth. The study concludes that fiscal space availability fosters inclusive growth, but this effect is mediated by governance quality in Africa.


Originality/value
Several studies examined the role of fiscal policy on inclusive growth. However, it is crucial to assess the fiscal space, that is, the financial capacity of the government to implement its fiscal policy without harming its financial stability. This paper, therefore, contributes to the existing literature by using de facto fiscal space indicator to comprehend fiscal dynamics contributing to inclusive growth. In addition, the paper uniquely constructs an inclusive growth index by including poverty severity, which considers both the incidence and depth of poverty and inequality in society.

AbstractThe article explores the causal effect of local climate conditions on household consumption in South Africa. The climatic conditions are represented by monthly average temperature and precipitation. The study utilises the nationally representative 2017 National Income Dynamics Study (NIDS), wave 5 data and 2017 Climate Research Unit (CRU) climate data. The parsimonious quantile regression shows that climatic conditions (precipitation, temperature, wet days, and cloud cover) impact household per capita consumption. The quadratic quantile regression model analysis shows that household per capita consumption is convex in precipitation. Below the turning point, increased precipitation is associated with decreased household per capita consumption. Above the turning point, increased precipitation is related to increased household per capita consumption. Regions that receive very low precipitation or experience extreme temperatures (very cold or very hot) require tailor-made interventions to alleviate consumption. When we control for household characteristics, the impact of climatic conditions on household per capita consumption is weak. Providing inclusive development policies and programmes can mitigate the impact of climatic conditions on household per capita consumption.