Working Paper: CEPR ID: DP15863
Authors: Sandro Ambuehl; B. Douglas Bernheim; Annamaria Lusardi
Abstract: We introduce a method for experimentally evaluating interventions designed to improve the quality of choices in settings where people imperfectly comprehend consequences. Among other virtues, our method yields an intuitive sufficient statistic for welfare that admits formal interpretations even when consumers suffer from biases outside the scope of analysis. We use it to study a financial education intervention, which we find improves the quality of decisions only when it incorporates practice and feedback, contrary to the implications of analyses based on conventional efficacy metrics. We trace the failures of conventional metrics to violations of assumptions that our method avoids.
Keywords: financial education; decision making; deliberative competence
JEL Codes: C91; D04; D14; D60; D91; I21
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| lack of practice and feedback (J24) | increased bias (D91) |
| educational intervention (I24) | deliberative competence (D70) |
| deliberative competence (D70) | reduction in discrepancies between reservation valuations (D61) |
| financial education intervention (G53) | decision quality (L15) |
| financial education intervention with practice and feedback (G53) | decision quality (L15) |