Take-Up of Financial Education: Demographic Characteristics and Prior Knowledge

Abstract

To improve consumers’ financial decisions, many policy makers support financial education programs. However, some eligible consumers do not participate, limiting program effectiveness. The authors examine a home-buying and mortgage education website offered to more than 6,000 prospective home buyers, documenting differences in take-up (i.e., who decides to participate) and duration of use by consumers’ demographic characteristics, objective knowledge, and subjective knowledge. These analyses rely on a unique data match between surveys measuring consumers’ characteristics and clickstream data tracking website use. The results show that older participants and first-time home buyers are more likely to take up the website, but otherwise there is little relationship between observable demographics and take-up. Consistent with enrichment theory, consumers who are more objectively knowledgeable have higher take-up. However, consistent with “feeling of knowing” research, a one-standard-deviation increase in subjective knowledge is associated with approximately a ten-percentage-point decrease in take-up (controlling for other factors). Subjectively knowledgeable consumers also use educational materials for a shorter duration. The findings add to literature on consumer information search and inform policy makers about consumers’ use of online financial education.

Sustainable Financial Education and Consumer Life Satisfaction

“…Most previous studies have suggested that financial education is positive in increasing consumers' financial knowledge and financial literacy, cultivating consumers' sense of rational investment, and improving their life satisfaction [46][47][48]. There is evidence that higher requirements of financial education contribute to increase individuals' financial knowledge, and thereby, are positively associated with fewer defaults and higher credit scores among young adults [46].…”

“…In addition, they also suggested that employees with financial education are more confident about future financial conditions, and therefore have higher job satisfaction and life satisfaction. In addition, Chin and Williams [48] examined the impact of online financial education on consumers' financial decisions, and the results showed that older participants and first-time home buyers are more likely to look up home-buying and mortgage education websites when framing financial decisions. Thus, financial education in the long-term is of importance in consumers' daily financial decisions, which are closely associated with their life satisfaction.…”

Attrition in a Longitudinal Online Randomized Controlled Trial with Prospective Homeowners

“…Our study is also the first, to our knowledge, to study the relationships between survey attrition and subjective numeracy or financial literacy, finding attrition to be negatively correlated with each. These characteristics may be important for capturing willingness to engage with financial topics, as demonstrated by correlations between financial literacy and stock market participation (van Rooij et al 2011) and voluntary enrollment in financial education (Chin and Williams 2020). As such, we expect that these measures would be particularly predictive of attrition in longitudinal research on financial topics.…”

“…All participants were invited to the same surveys. Those in the financial education group additionally received messages encouraging them to visit an educational website (Beckett and Chin 2019; Chin and Williams 2020), and those in the shopping encouragement group received messages about the importance of requesting and comparing multiple mortgage offers. In both treatment groups, these extra messages were delivered at the end of completed surveys and in email communications.…”

Implikasi Pendidikan Ekonomi Rumah Tangga pada Orangtua terhadap Perilaku Anak

“…Jenis Pendidikan Ekonomi Dilihat dari jenis atau macam pendidikan ekonomi yang diajarkan oleh keluarga dalam pendidikan ekonomi keluarga meliputi mengelolah keuangan seperti menabung, berhemat, pemberian uang saku, dan memberikan suatu pilihan ekonomi kepada anak serta mulai mengenalkan usaha yang dikelola oleh orangtua (Chin & Williams, 2019). Pengenalan usaha orangtua dirasa sangat penting terutama dalam hal ini penelitian dilakukan kepada keluarga pedagang yang sehari-harinya berkecimpung pada dunia ekonomi (Mondal & Mondal, 2020).…”