[Article] Financial literacy and psychological disaster preparedness: applicability of approach based on fuzzy functional dependencies

Article from Cost Action members, with acknowledgement to the Action

Miljan Vučetić, Zuzana Brokešová, Miroslav Hudec, Erika Pastoráková

Abstract: Recent catastrophes and crises emphasize the necessity of an individual’s and household’s preparedness for coping with these events. Previous research focuses mainly on short-term preparation and immediate response to catastrophes. The ex ante approach to managing long-term effects can rarely be found in literature, especially with an emphasis on financial preparedness. In this work, we use a soft computing method for analysing the social/psychological effects and implications. Specifically, we focus on data mining and linguistic interpretation of the effects of financial literacy on psychological preparedness for disasters, using fuzzy functional dependencies (FFDs). FFDs determine influences between features in datasets and examine neighbouring categorical answers with a certain degree of similarity, which overcomes indecisiveness when marking a categorical answer. Based on the surveyed data, we show that FFDs offer an approach for discovering additional patterns and explaining those patterns linguistically. Our results are as follows: financial literacy significantly influences anxiety, lack of control, nervousness, and fear of death (in order of intensity). Using this approach, we conclude that being better financially prepared can help in long-term disaster risk management. Financial preparedness is also helpful in mitigating psychological risks related to disasters. This paper provides results that can support the designing knowledge management solutions in order to improve psychological disaster preparedness.

Information Processing & Management

Volume 59, Issue 2, March 2022, 102848