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Addressing financial biases in university undergraduates: Unveiling connections with knowledge, behaviours and

Celia López-Penabad¹, Marcos Álvarez-Espiño¹, Leandro Benito-Torres²

¹Department of Financial Economics and Accounting, ECOBAS, Universidade de Santiago de Compostela, Spain.

|November 6, 2025

Abstract

Purpose:

This study investigates how financial knowledge, behaviours, and attitudes shape the prevalence of financial biases among Economics students at the University of Santiago de Compostela.

Methodology:

Based on survey data from 403 first- and fourth-year students, a composite bias index-covering overconfidence, gambler's fallacy, and herd behaviour-is constructed using the Benefit of the Doubt method. Truncated regressions explore the influence of financial capability.

Findings:

Results show attitudinal factors explain biases better than knowledge. Surprisingly, behaviours such as long-term planning and fraud avoidance increase susceptibility to biases. These findings highlight the complexity of financial decision-making and the need for emotionally aware, bias-targeted financial education.

Value:

This paper introduces a novel approach by constructing multiple financial bias indices and calling for hands-on, behaviour-focused financial education.

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