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The ABCs of Financial Education : Experimental Evidence on Attitudes, Behavior, and Cognitive Biases

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) particip...

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Bibliographic Details
Main Authors: Carpena, Fenella, Cole, Shawn, Shapiro, Jeremy, Zia, Bilal
Language:English
en_US
Published: World Bank, Washington, DC 2015
Subjects:
FINANCIAL EDUCATION IN SCHOOLS
DEPOSIT
FINANCIAL SERVICES
BORROWER
DURABLE GOODS
CREDIT CARDS
ATM CARDS
ACCOUNTING
CHECKS
FINANCIAL DECISIONS
DEPOSITS
BEHAVIORAL EFFECT
BEHAVIORAL ECONOMICS
EDUCATION PROGRAM
CALCULATION
GOAL SETTING
FINANCIAL MANAGEMENT
INCOME
INTEREST
LIFE INSURANCE
FINANCIAL MATTERS
CONTRIBUTION
FINANCIAL LITERACY
SAVINGS BEHAVIOR
SAVINGS ACCOUNTS
INTEREST RATE
RESOURCE MANAGEMENT
SPENDING
DISCOUNT RATE
PURCHASES
FINANCIAL EDUCATION COURSES
INFORMATION
BANK ACCOUNT
COMPUTATIONAL SKILLS
HEALTH INSURANCE
REPAYMENTS
CALCULATIONS
FINANCIAL GOAL SETTING
WELFARE
LOAN
FINANCIAL GOALS
KNOWLEDGE TEST
DIRECT DEPOSIT
CLASSROOM SESSIONS
FINANCIAL BEHAVIOR
FINANCIAL EDUCATION WORKSHOP
TRAINING PROGRAMS
CREDIT CARD
BUDGETING
SAVINGS PROGRAM
SAVING
RENTS
BUDGET
LITERACY
KNOWLEDGE
FINANCIAL CONCEPTS
SAVINGS
MATHEMATICS
BANKING PRODUCTS
SAVINGS GOAL
CONSUMER DEBT
TRAINING
LOW- INCOME
FINANCIAL COUNSELOR
RESERVE BANK
MONEY
TAKE-UP RATES
FINANCIAL ADVICE
PROBABILITY
FINANCES
SAVING BEHAVIOR
INTEREST RATES
SECONDARY SCHOOL
MARKETING
DEBT
FINANCIAL LITERACY TRAINING
HOUSEHOLD INCOME
FINANCIAL PRODUCTS
FINANCIAL HABITS
FINANCIAL TRAINING
POSITIVE FINANCIAL OUTCOMES
LOANS
FINANCIAL GOAL
FINANCIAL SYSTEM
INSURANCE POLICY
FINANCE
LOAN TERMS
SAVINGS ACCOUNT
FINANCIAL COUNSELORS
FINANCIAL LEARNING
COMPUTATIONAL SKILL
CONSUMER
MONETARY INCENTIVES
EXPENSES
FINANCIAL EDUCATION PROGRAMS
BEST PRACTICES
CONSUMER RESEARCH
FINANCIAL CRISIS
FINANCIAL EDUCATION PROGRAM
BANK
CREDIT
BUDGETS
DEMAND
FINANCIAL DECISION
KNOWLEDGE TESTS
WORKSHOP
FINANCIAL EDUCATION
REPAYMENT
CONSUMERS
PAMPHLETS
LOW-INCOME
MONTHLY INCOME
CURRICULUM
MONETARY INCENTIVE
BUSINESS SCHOOL
HOUSEHOLD SAVINGS
DISCOUNT RATES
INSURANCE
FINANCIAL OUTCOMES
PAYMENT AMOUNT
EDUCATION PROGRAMS
PURCHASE
EDUCATION
COLLEGE FRESHMEN
MINIMUM PAYMENT
ATM
TRAINING PROGRAM
FINANCIAL ACTIONS
DEBT REPAYMENTS
HOUSEHOLD BORROWING
PERSONAL SAVINGS
STUDENTS
INVESTMENTS
BORROWING
DEBT REPAYMENT
FINANCIAL KNOWLEDGE
FINANCIAL CONSEQUENCES
RISK AVERSION
INHERITANCE
CREDIT CARD PAYMENT
HIGH SCHOOL STUDENTS
FINANCIAL SECTOR
VALUE OF MONEY
FINANCIAL EDUCATION COURSE
RESEARCH ASSISTANCE
FINANCIAL INCENTIVES
INDIVIDUAL COUNSELING
EMPLOYEE SAVING
Online Access:http://documents.worldbank.org/curated/en/2015/09/25050693/abcs-financial-education-experimental-evidence-attitudes-behavior-cognitive-biases
http://hdl.handle.net/10986/22669
Description
Summary: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.

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