2018 1 MARÍA JOSÉ ROA , IGNACIO GARRÓN, AND JONATHAN BARBOZA Financial Decisions and Financial Capabilities in the Andean Region This paper analyzes the importance of numerical abilities, conscien- tiousness, and financial literacy for individuals’ financial decision mak- ing and participation in formal financial markets. Our analysis is based on the Financial Capabilities Survey, which was applied in four coun- tries of the Andean Region: Bolivia, Colombia, Ecuador, and Peru. The empirical analysis underlines the centrality of numerical abilities, dif- ferent subfacets of conscientiousness (propensity to plan, perseverance, and scrupulosity), and financial literacy in developing a propensity to save and borrow, and in participating in the formalfinancial sector. This study considers as its focus the importance, when it comes to financial decision making and participation in the formal financial sector, of financial capabilities associated with numerical abilities, of conscien- tiousness, and of financial literacy. Our analysis is based on the Financial Capabilities Survey (FCS) applied by CAF–The Development Bank of Latin America in four countries of the Andean region: Bolivia, Colombia, Ecuador, and Peru. A particular area of interest is the financial decisions related to using formal and/or informal instruments, which is an important question in the countries we consider. In the Andean countries under study, economic and financial devel- opment follows a pattern that is similar to that of countries in Latin María José Roa (roa@cemla.org) is Senior Researcher at the Center for Latin American Monetary Studies, CEMLA. Ignacio Garrón (igarron@bcb.gob.bo) is Senior Financial Analyst at the Central Bank of Bolivia. Jonathan Barboza is Economist (jbarboza@cemla.org) at CEMLA. The authors thank two anonymous referees for many valuable comments, which greatly improved the quality and the exposition of the paper. This paper was undertaken as part of the joint research project on Households’ Financial Decision Making, coordinated by CEMLA and CAF–The Development Bank of Latin America. The authors especially appreciate the valuable support of Diana Mejía from CAF. An earlier draft of this paper was presented at the XXI Meeting of the Central Bank Researchers Network, Brasilia, November 7–8, 2016, and at the third Cherry Blossom Financial Education Institute, Washington, April 6–7, 2017. The authors thank the participants for their very useful comments. We are especially grateful to Annamaria Lusardi, Rob Alessie, Gabriel Garber, Carolina Rodriguez, and Oscar Carvallo for their valuable comments and suggestions. We thank Juliana Gamboa for her research assistance. We also acknowledge financial support from the Instituto de Investigaciones Económicas y Sociales Francisco de Vitoria (IIES), Madrid, Spain. The Journal of Consumer Affairs, 2018 DOI: 10.1111/joca.12187 Copyright 2018 by The American Council on Consumer Interests