Lack of exercise, which increases the risk of many serious physical and mental illness, has been a common health issue in Japan. Recent studies confirm that financial literacy discourages irrational behavior like gambling and smoking. We therefore investigate how financial literacy, as a rational decision-making instrument, relates to peoples’ exercise behavior in Japan. We hypothesize that financial literacy encourages people to exercise regularly. Using Osaka University’s Preference Parameters Study (PPS) for 2010, we categorized respondents into two groups: those who exercise regularly or at least once a week and those who do not. Our probit estimation results show that financial literacy is positively related with exercise behavior, meaning that financially literate people are more likely to exercise regularly. As the COVID-19 health pandemic seems to exacerbate peoples’ physical inactivity, the results of our study show an alternative approach to encourage exercise. We therefore recommend that governments implement a financial literacy improvement policy to alleviate the lack of exercise.

The COVID-19 pandemic has caused a recession in the global economy. Many households have been experiencing financial difficulties. In order to curb its ripple effects on households, the Japanese government distributed a one-time cash payment of JPY 100,000 to every registered resident at the beginning of the pandemic. We utilized Hiroshima University’s Household Behavioral and Financial Survey in 2020 and 2021, and found that only 20% of the observations were satisfied with the one-time payment they received. We performed probit regression and found that those who were male, older, had a higher education level, and had anxiety about the future were less likely to be satisfied with this policy. Having a spouse, being a public official, and having higher household assets or better subjective health enhanced satisfaction with the policy. Our subsample analyses showed heterogeneity in satisfaction among various socioeconomic groups and in associations between their socioeconomic characteristics and policy satisfaction. The government should design future policies with due consideration of the challenges faced by various socioeconomic groups.