1. The ABCs of Financial Education : Experimental Evidence on Attitudes, Behavior, and Cognitive Biases
- Author
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Carpena, Fenella, Cole, Shawn, Shapiro, Jeremy, and Zia, Bilal
- Subjects
FINANCIAL HABITS ,INFORMATION ,FINANCIAL OUTCOMES ,BUDGET ,PURCHASE ,FINANCIAL EDUCATION IN SCHOOLS ,DURABLE GOODS ,HEALTH INSURANCE ,DISCOUNT RATES ,TRAINING PROGRAMS ,MATHEMATICS ,DEPOSIT ,MONETARY INCENTIVE ,CREDIT CARDS ,COMPUTATIONAL SKILL ,CREDIT CARD ,COLLEGE FRESHMEN ,DEBT REPAYMENT ,FINANCIAL SECTOR ,RISK AVERSION ,EMPLOYEE SAVING ,INCOME ,INVESTMENTS ,PERSONAL SAVINGS ,PAMPHLETS ,FINANCIAL CONCEPTS ,FINANCIAL TRAINING ,FINANCIAL GOAL SETTING ,FINANCIAL EDUCATION ,FINANCIAL CRISIS ,EDUCATION ,CALCULATIONS ,SAVINGS ACCOUNTS ,CURRICULUM ,BANK ,FINANCIAL COUNSELOR ,LOANS ,FINANCIAL ADVICE ,FINANCIAL KNOWLEDGE ,TRAINING PROGRAM ,FINANCIAL EDUCATION WORKSHOP ,FINANCIAL MATTERS ,KNOWLEDGE TEST ,STUDENTS ,BORROWER ,DEPOSITS ,INHERITANCE ,RESOURCE MANAGEMENT ,FINANCE ,CALCULATION ,FINANCIAL ACTIONS ,FINANCIAL EDUCATION PROGRAMS ,SAVINGS BEHAVIOR ,FINANCIAL INCENTIVES ,LOW- INCOME ,WELFARE ,HIGH SCHOOL STUDENTS ,INDIVIDUAL COUNSELING ,COMPUTATIONAL SKILLS ,LITERACY ,MONEY ,WORKSHOP ,SAVINGS GOAL ,INTEREST RATES ,CONTRIBUTION ,DISCOUNT RATE ,DEBT ,SAVING ,POSITIVE FINANCIAL OUTCOMES ,SAVINGS PROGRAM ,FINANCIAL SERVICES ,BEHAVIORAL EFFECT ,FINANCIAL DECISION ,CONSUMER DEBT ,RESERVE BANK ,MARKETING ,FINANCIAL MANAGEMENT ,FINANCIAL PRODUCTS ,FINANCIAL LITERACY ,KNOWLEDGE TESTS ,RENTS ,VALUE OF MONEY ,DEMAND ,CONSUMERS ,MONETARY INCENTIVES ,LOW-INCOME ,PURCHASES ,INSURANCE POLICY ,SAVINGS ACCOUNT ,HOUSEHOLD BORROWING ,FINANCIAL GOALS ,BANK ACCOUNT ,SAVING BEHAVIOR ,CONSUMER RESEARCH ,ATM CARDS ,DEBT REPAYMENTS ,ACCOUNTING ,GOAL SETTING ,BUDGETS ,FINANCES ,FINANCIAL CONSEQUENCES ,EXPENSES ,MONTHLY INCOME ,FINANCIAL DECISIONS ,FINANCIAL EDUCATION COURSES ,EDUCATION PROGRAMS ,REPAYMENTS ,FINANCIAL BEHAVIOR ,FINANCIAL LITERACY TRAINING ,PROBABILITY ,FINANCIAL SYSTEM ,BANKING PRODUCTS ,BEST PRACTICES ,INSURANCE ,SECONDARY SCHOOL ,FINANCIAL GOAL ,LIFE INSURANCE ,CONSUMER ,SPENDING ,EDUCATION PROGRAM ,TRAINING ,HOUSEHOLD INCOME ,BORROWING ,LOAN ,CREDIT ,TAKE-UP RATES ,LOAN TERMS ,PAYMENT AMOUNT ,FINANCIAL EDUCATION PROGRAM ,KNOWLEDGE ,FINANCIAL LEARNING ,BUSINESS SCHOOL ,MINIMUM PAYMENT ,REPAYMENT ,FINANCIAL EDUCATION COURSE ,INTEREST ,CLASSROOM SESSIONS ,HOUSEHOLD SAVINGS ,BUDGETING ,RESEARCH ASSISTANCE ,SAVINGS ,FINANCIAL COUNSELORS ,ATM ,CHECKS ,CREDIT CARD PAYMENT ,DIRECT DEPOSIT ,INTEREST RATE ,BEHAVIORAL ECONOMICS - Abstract
This paper uses a large scale field experiment in India to study attitudinal, behavioral, and cognitive constraints that stymie the link between financial education and financial outcomes. The study complements financial education with (i) participant classroom motivation with pay for performance on a knowledge test, (ii) intensity of treatment with personalized financial counseling, and (iii) behavioral nudges with financial goal setting. The analysis finds no impact of pay for performance but significant effects of both counseling and goal setting on real financial outcomes. These results identify important complements to financial education that can bridge the gap between financial knowledge and financial behavior change.
- Published
- 2015