The ABCs of Financial Literacy–Experimental Evidence on Attitudes, Behavior and Cognitive Biases
The ABCs of Financial Literacy–Experimental Evidence on Attitudes, Behavior and Cognitive Biases
7 July, 2020 •Similar Articles
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This paper uses a large-scale field experiment in India to study attitudinal, behavioural, 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 counselling, and (iii) behavioural nudges with financial goal setting. The analysis finds no impact of pay for performance but significant effects of both counselling 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 behaviour change.