Learning by Trading

47 Pages Posted: 22 May 2018 Last revised: 27 Jul 2018

See all articles by Saumitra Jha

Saumitra Jha

Stanford Graduate School of Business

Moses Shayo

The Hebrew University of Jerusalem - Department of Economics

Date Written: July 26, 2018


How can we help individuals handle financial decisions in an increasingly complex environment? We explore an easily scalable avenue for improving financial understanding: learning by online trading in stocks. We randomly assign 1345 adults incentives and opportunities to trade stocks for 4-7 weeks, with no additional educational content. The treatment significantly improves financial literacy and attenuates the gender gap in self-assessed financial knowledge. Treated individuals are more likely to subsequently invest in stocks and less likely to seek external advice. The effects strengthen for those exposed to index funds, foreign assets, and rising or more volatile asset prices.

Keywords: field experiment, financial literacy, stockmarket participation, gender gap, behavioral finance

JEL Classification: A2, G11, G41, J16, O16

Suggested Citation

Jha, Saumitra and Shayo, Moses, Learning by Trading (July 26, 2018). Stanford University Graduate School of Business Research Paper No. 3673. Available at SSRN: https://ssrn.com/abstract=3174944 or http://dx.doi.org/10.2139/ssrn.3174944

Saumitra Jha (Contact Author)

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Moses Shayo

The Hebrew University of Jerusalem - Department of Economics ( email )

Mount Scopus
Jerusalem, IL Jerusalem 91905

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