Poll: Israelis Woefully Ignorant of Economic ABCs

The richer you are, the more likely you are to know about basic economic and financial principles - and that's a real problem.

Sarah Leah Lawent ,

Money (illustrative)
Money (illustrative)
Flash 90

A study instigated  by Israeli credit/debit card company CAL, has highlighted the embarrassing degree to which Israelis lack a basic familiarity with a fundamental economic vocabulary and principals.

Approximately 501 Israelis aged 18 years of age and older took part in the survey, which was conducted by the GeoCartographia Institute. 

The survey was conducted to help compose a series of 11 minute-long videos to air on their new YouTube channel, entitled “Cal Knows”, aimed at giving the Israeli public a working vocabulary and understanding of economic basics – the ‘101’ course, if you will. Questions were posed in an open-ended style, as opposed to multiple-choice, so that those questioned could answer to the best of their abilities using their own words. 

The results showed, for instance, that 79.4% of Israelis do not know the meaning of the term ‘prime rate’.  And only 20.6% of those who were familiar with the term were able to describe it correctly. 19% of respondents said they were familiar with the term, but in fact, gave incorrect answers, and 47% indicated that they had heard the term but did not know what it meant. 13% stated that they had never even heard the term.

Even more surprising results were to the question, “Have you ever heard of ‘The Bank of Israel Interest Rate’, and if so, please describe the concept.” 82.2% had never heard the term or were unable to describe the concept, which, essentially, is the rate of interest the Bank of Israel’s Governor announces at the end of each month and that the bank publishes as one of the indicators that reflect its policies, and which is then used by banking corporations to determine changes in interest rates for deposits and credit in shekels provided by them.

81% said they weren’t familiar with any sources that could give them reliable information in the financial field, which is rather surprising considering that there is more financial market information out there than ever for the small investor to access.

Important to note is the direct correlation the survey found between the socio-economic level of the person being interviewed and the level of financial knowledge. For example, 30% of those who had above average incomes knew what the term ‘prime rate’ meant, whereas only 14% of those who earned below the salary mean were able to answer correctly.

Such a contrast is perhaps unsurprising, but raises worrying questions over the growing economic disparity between the richest and poorest sectors of the Israeli population.