Purpose This study investigates how individuals' level of financial knowledge is associated with their vulnerability to financial fraud and whether living alone (a social isolation proxy) conditions this relationship. Design/methodology/approach Financial fraud vulnerability (FFV) is conceptualized as a behavioral risk index capturing engagement in behaviors that increase fraud exposure. Using nationally representative survey data from 2,000 Korean adults, OLS models were estimated, with Poisson and item-level logistic regressions used as robustness checks. Two-stage least squares (2SLS), instrumenting financial knowledge with financial education experience, addressed potential endogeneity. Findings In OLS and Poisson models, financial knowledge is negatively associated with fraud vulnerability, and this association is significantly stronger among individuals living alone; item-level logistic results are consistent. However, after the 2SLS correction, this association becomes non-significant, whereas living alone remains a robust positive predictor across all specifications. This suggests that the apparent protective role of financial knowledge may partly reflect unobserved confounding, while the association between living alone and fraud vulnerability appears to be consistently robust. Practical implications Since the protective association of financial knowledge is not robust to endogeneity correction, fraud prevention should not rely on financial education alone. Behaviorally informed strategies for socially isolated individuals are especially important in Korea's rapidly evolving digital finance environment. Originality/value This study reconceptualizes financial fraud vulnerability as a behavioral risk index and identifies living alone as a structural condition moderating this protective role. By integrating OLS, Poisson, logistic, and instrumental-variable approaches, it offers a more cautious empirical reading of the financial knowledge–fraud vulnerability relationship.
Lee et al. (Tue,) studied this question.