Financial Literacy and Self-Control in FinTech: Evidence from a Field Experiment on Online Consumer Borrowing

58 Pages Posted: 24 Oct 2019

See all articles by Di Bu

Di Bu

Macquarie University

Tobin Hanspal

WU Vienna University of Economics and Business

Yin Liao

Macquarie University - Department of Applied Finance and Actuarial Studies; Australian National University - The Centre for Applied Macroeconomic Analysis (CAMA)

Yong Liu

Wuhan University of Science and Technology

Date Written: October 14, 2019

Abstract

We report the results of a longitudinal intervention with students across five universities in China designed to reduce online consumer debt. Our research design allocates individuals to either a financial literacy treatment, a self-control training program, or a zero-touch control group. Financial education interventions improve test scores on general financial literacy but only marginally affect future online borrowing. Our self-control treatment features detailed tracking of spending and borrowing activity with a third-party app and introspection about individuals' consumption with a counselor. These sessions reduce future online borrowing, delinquency charges, and borrowing for entertainment reasons - and are driven by the male subjects in the sample. Our results suggest that self-regulation can affect financial behavior in e-commerce platforms.

Keywords: Financial Literacy, Online Borrowing, Consumer Credit, Self-Control, FinTech, China

JEL Classification: G51, G53, D14, D18, G23, G21

Suggested Citation

Bu, Di and Hanspal, Tobin and Liao, Yin and Liu, Yong, Financial Literacy and Self-Control in FinTech: Evidence from a Field Experiment on Online Consumer Borrowing (October 14, 2019). Available at SSRN: https://ssrn.com/abstract=3469571 or http://dx.doi.org/10.2139/ssrn.3469571

Di Bu

Macquarie University ( email )

North Ryde
Sydney, New South Wales 2109
Australia

Tobin Hanspal (Contact Author)

WU Vienna University of Economics and Business ( email )

Welthandelsplatz 1 1
Wien, 1020
Austria

Yin Liao

Macquarie University - Department of Applied Finance and Actuarial Studies ( email )

Eastern Rd.
North Ryde
Sydney, NSW 2109
United States

Australian National University - The Centre for Applied Macroeconomic Analysis (CAMA) ( email )

Canberra, Australian Capital Territory 2601
Australia

Yong Liu

Wuhan University of Science and Technology ( email )

947 Heping Avenue,Qingshan District
null
Wuhan, Hubei 430081
China

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