BUS105 Statistics – Financial Literacy Analysis of Singapore Employees

Question 1

Financial literacy is widely recognised as a key factor in reducing financial vulnerability and long-term economic inequality. In Singapore, differences in access to financial education may contribute to unequal financial preparedness among working adults.

A Singapore-based human resource consultancy conducted a study to examine financial literacy among full-time employees. Participants completed a standardised financial literacy assessment covering topics such as budgeting, interest rates, inflation, and basic investment concepts. Each participant received a financial literacy score ranging from 0 to 100 (whole numbers only), where higher scores indicate stronger financial knowledge.

For analysis, employees were classified into two groups:

• Training: employees whose employers provide structured workplace financial education programmes, and
• No Training: employees whose employers do not provide such programmes.

The responses are provided in the Excel file Financial Literacy Score.xlsx.

The consultancy would like to use this dataset to generate preliminary insights on whether access to workplace financial education may be associated with differences in financial preparedness among employees in Singapore. Suppose you are a data analyst intern working at this consultancy. Prepare the following deliverables for the team manager:

• Please limit your answer (including tables and graphs) to one (1) page.
  • Identify the main variable of interest in this study. Classify it as either qualitative or quantitative. If it is quantitative, further classify it as either continuous or discrete. Provide justifications for your answers.
  • Report the relevant descriptive statistics in one (1) table to compare financial literacy scores between the two groups. Create two (2) histograms, one for each group, to illustrate the distribution of financial literacy scores. You are not required to describe or comment on the outputs yet.
• Based on the descriptive outputs from part (a), develop a report that addresses the following:
• Describe and interpret the table and charts
• Draw a preliminary conclusion to support managerial insights

Your report should be concise and well-structured and should not exceed 500 words. Please indicate the word count at the end of your answer.

• According to a recognised expert, employees’ financial literacy scores in an ideal society are distributed with a mean of 65 and a standard deviation of 20. Using this benchmark, calculate an appropriate probability and discuss whether the financial literacy of the Singapore employee population is higher than that of the benchmark society. Justify the use of your analysis method.

You may treat the combined responses from both groups as a representative sample of Singapore employees. Please limit your answer (including tables and graphs, if any) to one (1) page.

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Experts Answer on Above Questions on Statistics

Mean variable of interest

The main variable is the financial literacy score, and the type of data is quantitative. It is classified as discrete, and the score is justified because it represents a numerical measure of financial literacy, and participants get a whole number scores only.

Descriptive statistics

The mean value is 76.25 with training and 55.90 with no training. The median is 78 and 59.50 respectively for training and no training, while the standard deviation is 10.16 and 13.03. The range is 40 with training and 51 with no training. The histogram for training group and no training group is included in the appendix section.

Interpretation and preliminary managerial conclusion

The financial literacy score is significantly higher for those employers who provide financial education to their employees, as it is evident from the scores of no financial groups. The median score also revealed the same pattern for the training group as compared to no training group. This descriptive evidence shows a strong positive relationship between access to structured workplace financial education and employees financial literacy. It is therefore crucial for the management to consider work list financial education as a useful intervention.

Comparison with the benchmark society

With respect to the combined Singapore sample, the sample size is 80, sample mean is 68.075, sample standard deviation is 14.229, benchmark mean is 65 and benchmark standard deviation is 20. Considering this data, a one sample Z test is considered appropriate for the given population mean.
Testing – H0 is 65 and H1>65
The test statistics is z = (68.075-65)/(20/√80) = 1.375
The one tailed probability is approx 8.45%.

Interpretation

The Singapore sample mean is 68.075 and it is quite higher than the mean of 65, a 8.45% probability of obtaining a sample mean so high as compared to the true mean which is 65, is not sufficiently small at the 5% significant level. This clearly indicates insufficient statistical evidence to conclude that the Singapore employees have a higher population mean financial literacy score as compared to the benchmark society.

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