TY - JOUR
T1 - Financial Ratios and Financial Satisfaction: Exploring Associations between Objective and Subjective Measures of Financial Well-being among Older Americans
T2 - Exploring Associations Between Objective and Subjective Measures of Financial Well-Being Among Older Americans
AU - Tenney, Jacob
AU - Kalenkoski, Charlene
N1 - Publisher Copyright:
© Copyright 2019 Association for Financial Counseling and Planning Education, U.S.A.
PY - 2019/11/1
Y1 - 2019/11/1
N2 - This study explores the relationship between objective measures and perceptions of financial well-being for older Americans. Financial well-being is measured objectively using three financial ratios including the liquidity ratio, the debt-to-asset ratio, and the investment ratio. Individuals' perceptions of their financial well-being are measured by a question in the Health and Retirement Study that asks respondents how satisfied they are with their present financial condition. An ordered probit model is used to examine the relationship between the perceptions of financial well-being and the three financial ratios. The findings in this analysis suggest that there is a positive relationship between the investment ratio and perceptions of financial well-being. There is also a small but statistically significant improvement in the perception of financial well-being with increases in the liquidity ratio. For large categorical differences, the positive relationship also holds for the debt-to-asset ratio.
AB - This study explores the relationship between objective measures and perceptions of financial well-being for older Americans. Financial well-being is measured objectively using three financial ratios including the liquidity ratio, the debt-to-asset ratio, and the investment ratio. Individuals' perceptions of their financial well-being are measured by a question in the Health and Retirement Study that asks respondents how satisfied they are with their present financial condition. An ordered probit model is used to examine the relationship between the perceptions of financial well-being and the three financial ratios. The findings in this analysis suggest that there is a positive relationship between the investment ratio and perceptions of financial well-being. There is also a small but statistically significant improvement in the perception of financial well-being with increases in the liquidity ratio. For large categorical differences, the positive relationship also holds for the debt-to-asset ratio.
KW - financial ratios
KW - financial well-being
UR - http://www.scopus.com/inward/record.url?scp=85075654332&partnerID=8YFLogxK
U2 - 10.1891/1052-3073.30.2.231
DO - 10.1891/1052-3073.30.2.231
M3 - Article
VL - 30
SP - 231
EP - 243
JO - Journal of Financial Counseling and Planning
JF - Journal of Financial Counseling and Planning
IS - 2
ER -