This research aims to investigate the effects of waqf literacy, encompassing both subjective and objective aspects, on cash waqf behavior and its subsequent impact on subjective well-being in Indonesia.
Using a quantitative methodology featuring structural equation modeling-partial least squares and multigroup analysis, data were gathered from 440 Muslim participants categorized by gender and levels of objective knowledge.
The results indicate that subjective knowledge is a significant predictor of trust and waqf behavior, especially among males and individuals with lower objective literacy, implying the existence of cognitive bias aligned with the Dunning–Kruger effect. Cash waqf behavior is also shown to improve subjective well-being, which shows the spiritual and emotional benefits of Islamic charitable acts.
The findings carry practical implications for waqf institutions, emphasizing the need for demographic-sensitive literacy programs and targeted trust-building initiatives. Recognizing that individuals with different levels of knowledge and gender respond differently, institutions can design inclusive approaches that foster participation.
This study introduces originality by incorporating cognitive bias theory into the waqf behavior framework, a viewpoint that has been predominantly neglected in prior Islamic finance literature.
