The Impact of Financial Education on Adolescents' Intertemporal Choices

60 Pages Posted: 21 Aug 2014

See all articles by Melanie Lührmann

Melanie Lührmann

University of Mannheim - Mannheim Research Institute for the Economics of Aging (MEA)

Marta Serra-Garcia

University of California, San Diego (UCSD) - Rady School of Management

Joachim K. Winter

Ludwig Maximilian University of Munich (LMU); CESifo (Center for Economic Studies and Ifo Institute); Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA); Deutsche Bundesbank - Research Department

Date Written: January 31, 2018

Abstract

We study the impact of financial education on intertemporal choice in adolescence. The educational program was randomly assigned among high-school students and choices were measured using an incentivized experiment. Students who participated in the program make more time-consistent choices; are more likely to allocate payments to a single payment date, as opposed to spreading payment across two dates; and display increased consistency of choice with the law of demand. These findings suggest that financial education increases the quality of intertemporal decision-making and decreases narrow bracketing.

Keywords: intertemporal choice, financial education, experiment

JEL Classification: D140, D910, C930

Suggested Citation

Lührmann, Melanie and Serra-Garcia, Marta and Winter, Joachim K., The Impact of Financial Education on Adolescents' Intertemporal Choices (January 31, 2018). CESifo Working Paper Series No. 4925. Available at SSRN: https://ssrn.com/abstract=2483682

Melanie Lührmann

University of Mannheim - Mannheim Research Institute for the Economics of Aging (MEA) ( email )

D-68131 Mannheim
Germany

Marta Serra-Garcia

University of California, San Diego (UCSD) - Rady School of Management ( email )

9500 Gilman Drive
Rady School of Management
La Jolla, CA 92093
United States

Joachim K. Winter (Contact Author)

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA) ( email )

Amalienstrasse 33
Munich, 80799
Germany

Deutsche Bundesbank - Research Department ( email )

PO Box 10 06 02
D60006 Frankfurt
Germany

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