Financial (Dis-)Information : Evidence from an Audit Study in Mexico
An audit study was conducted in peri-urban Mexico to understand the quality of information and products offered to low-income potential customers. Trained auditors visited multiple financial institutions seeking credit and savings products. Consist...
| Main Authors: | , , |
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2014/05/19611184/financial-dis-information-evidence-audit-study-mexico http://hdl.handle.net/10986/18784 |
| Summary: | An audit study was conducted in
peri-urban Mexico to understand the quality of information
and products offered to low-income potential customers.
Trained auditors visited multiple financial institutions
seeking credit and savings products. Consistent with Gabaix
and Laibson (2006), staff voluntarily provides little
information about avoidable fees, especially to auditors
trained to reveal little knowledge about the market. In
addition, clients are almost never offered the cheapest
product, most likely because staff is incentivized to offer
more expensive products that are thus more profitable to the
institution. This suggests that disclosure and transparency
policies may be ineffective if they undermine the commercial
interest of financial institutions. |
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