Discounting financial literacy: Time preferences and participation in financial education programs
- Creators
- Meier, Stephan
- Sprenger, Charles D.
Abstract
Many policymakers and economists argue that financial literacy is key to financial well-being. But why do many individuals remain financially illiterate despite the benefits of being financially informed? This paper presents results from a field study linking individual decisions to acquire financial information to a normally unobservable characteristic: time preferences. We elicited time preferences using incentivized choice experiments for all individuals to whom a financial education program was offered. Our results show that individuals who choose to acquire personal financial information have substantially higher discount factors than individuals who do not. The results can be interpreted as non-participants discount the benefits of being financially literate more.
Additional Information
© 2012 Elsevier B.V. Received 15 June 2010, Revised 16 December 2011, Accepted 14 February 2012, Available online 27 March 2012. We are grateful to James Andreoni, Daniel Benjamin, Chris Foote, Andreas Fuster, Lorenz Goette, Glenn Harrison, Simon Luechinger, Joanna Stavins, Alois Stutzer, the editor Catherine Eckel, two anonymous referees and the Federal Reserve Bank of Boston. This research project was started while both authors were working at the Federal Reserve Bank of Boston. The views expressed in this paper are, however, those of the authors and not necessarily those of the Federal Reserve System or the Federal Reserve Bank of Boston. This paper was previously entitled "Selection into Financial Literacy Programs: Evidence from a Field Study".Attached Files
Submitted - dp3507.pdf
Supplemental Material - 1-s2.0-S0167268112000625-mmc1.pdf
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Additional details
- Alternative title
- Selection into Financial Literacy Programs: Evidence from a Field Study
- Eprint ID
- 104484
- DOI
- 10.1016/j.jebo.2012.02.024
- Resolver ID
- CaltechAUTHORS:20200721-133841705
- Created
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2020-07-21Created from EPrint's datestamp field
- Updated
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2021-11-16Created from EPrint's last_modified field