Unshrouding product-specific attributes through financial education

67 Pages Posted: 8 Feb 2020 Last revised: 8 Apr 2021

See all articles by Olga Balakina

Olga Balakina

Aarhus University

Vimal Balasubramaniam

Queen Mary University of London; Centre for Economic Policy Research (CEPR)

Aditi Dimri

University of Warwick

Renuka Sane

National Institute of Public Finance and Policy

Date Written: April 8, 2021

Abstract

We present a welfare framework to evaluate the market effects of financial education interventions. Using this framework, we assess a new product-specific rules of thumb-driven consumer financial education program provided just before purchase decisions. While our intervention improves knowledge and outcomes for newly-educated consumers, it is a Pareto-improvement only under a narrow set of conditions, as are other interventions in the literature. Our findings suggest that positive treatment effects for a small fraction of consumers may come at the cost of other uninformed consumers in retail financial markets, making positive effects necessary but not sufficient to adopt financial education policies.

Keywords: financial education, financial literacy, household finance

JEL Classification: G22, G5, G52

Suggested Citation

Balakina, Olga and Balasubramaniam, Vimal and Dimri, Aditi and Sane, Renuka, Unshrouding product-specific attributes through financial education (April 8, 2021). Available at SSRN: https://ssrn.com/abstract=3519845 or http://dx.doi.org/10.2139/ssrn.3519845

Olga Balakina

Aarhus University ( email )

Fuglesangs Allé 4
Aarhus V, 8210
Denmark

Vimal Balasubramaniam (Contact Author)

Queen Mary University of London ( email )

Mile End Road
London, London E1 4NS
United Kingdom

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Aditi Dimri

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

Renuka Sane

National Institute of Public Finance and Policy ( email )

18/2, Satsang Vihar Marg
New Delhi, 110067
India

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