Cultivating Self-Control in FinTech: Evidence from a Field Experiment on Online Consumer Borrowing

62 Pages Posted: 24 Oct 2019 Last revised: 8 Sep 2020

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: May 2020

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. The self-control training program features detailed tracking of spending and borrowing, budgeting, and introspection about consumption choices. These sessions reduce future online borrowing and delinquency charges, mainly driven by a reduction in entertainment-related spending and borrowing. In contrast, financial literacy interventions improve test scores but only marginally affect borrowing. Our results suggest that cultivating self-regulation and budgeting skills can largely improve borrowing behavior on e-commerce platforms.

Keywords: Self-control, Online borrowing, Consumer credit, FinTech, Financial literacy

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

Suggested Citation

Bu, Di and Hanspal, Tobin and Liao, Yin and Liu, Yong, Cultivating Self-Control in FinTech: Evidence from a Field Experiment on Online Consumer Borrowing (May 2020). SAFE Working Paper No. 273, 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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