Financial literacy assessments typically rely on sample surveys containing sets of questions designed to gauge respondents’ comprehension of fundamental financial concepts necessary for making informed decisions. The answers to such questions, either categorical or continuous in nature, generally include a “Do not know” option. If those who choose the “Do not know” option are not a random sample of the population but exhibit peculiar characteristics, treating these observations as either incorrect responses or as missing data may distort the results regarding the determinants of financial literacy. A noteworthy case lies in the observation from survey studies that women tend to choose the “Do not know” option more frequently than men. In similar cases, treating the “Do not know” responses as incorrect answers increases the gender gap in financial literacy while treating them as missing values reduces the gap. We propose using a model with sample selection, which enables us to disentangle the inclination to answer “Do not know” from actual responses. By applying this model to a representative sample of the UK population, we do not find any systematic gender gap in financial knowledge. The study’s novel treatment of “Do not know” responses contributes valuable insights to the broader discourse on the determinants of financial literacy and the related gender-based differences.

Survey studies consistently observe that women tend to choose the “Do not know” option more frequently, although this does not necessarily indicate a lack of knowledge. Overlooking potential disparities in the proportion of respondents between genders may inflate reported statistics on the gender gap in financial literacy. However, with few exceptions, researchers often do so. Our contribution to this literature involves the application of a model with selection, allowing us to disentangle the attitude to answer “Do not know” from actual responses. This paper investigates the gender gap in financial literacy using the 2018 UK Financial Capability Survey. We do not find any systematic gender gap. The study’s novel treatment of “Do not know” responses contributes valuable insights to the broader discourse on the determinants of financial literacy among the population and the related gender-based differences.

The rapid expansion of digital currencies—including cryptocurrencies, stablecoins and central bank digital currencies (CBDCs)—has reshaped the monetary landscape. As is usual, moments of technologi...