The Impact of Financial Literacy on Students' Behavioral Biases in Financial Decision-Making in Kazakhstan (Astana Focus)

Abstract

This research aims to explore how financial literacy relates to decision-making biases among young adults in Astana, Kazakhstan. It focuses on three biases: overconfidence (overestimating one’s knowledge), loss aversion (fearing losses more than valuing gains), and present bias (preferring short-term rewards over long-term benefits). Data was collected through an online survey of 200 university students. Participants completed a standardized financial literacy test and behavioral tasks measuring these biases. The analysis used ordinary least squares (OLS) regression models. Each model examined the effect of financial literacy on each bias while controlling for gender, age, academic major, and education level. Results show that higher financial literacy is significantly associated with lower overconfidence (β = –0.740, p < .001) and lower present bias (β = –0.084, p = .033). However, loss aversion appears unaffected by literacy levels (β = 0.009, p = .823). Among demographic variables, gender, academic major and education level had significant effects. Male and Economics & Business students exhibited higher levels of overconfidence and present bias. In contrast, Humanities & Education students reported lower levels of overconfidence but higher levels of present bias. Graduate students showed significantly lower overconfidence compared to undergraduates. These findings highlight the need to combine financial education with behavioral strategies. Future research should use longitudinal or experimental methods and more diverse samples to examine causal effects across different demographic groups.