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Harnessing Emotional Connections to Improve Financial Decisions: Evaluating the Impact of Financial Education in Mainstream Media

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  • Gunhild Berg
  • Bilal Zia

Abstract

Responsible financial habits are important for economic welfare, yet it remains unclear whether they can be effectively taught. Entertainment media offers a unique and cost-effective channel of reaching millions of viewers with financial education messages that resonate. This paper uses random and symmetric encouragement methodology to study the economic impact of targeted messages on debt management and gambling scripted in a popular television soap opera in South Africa. The results show treated viewers score significantly higher on financial knowledge, are more likely to borrow from formal sources and for productive purposes, and are less likely to enter into retail credit or gamble. Quantitative and qualitative analyses of mechanisms show strong recall of messages conveyed by the lead character, which supports theories of psychological and emotional influences on decision-making.

Suggested Citation

  • Gunhild Berg & Bilal Zia, 2017. "Harnessing Emotional Connections to Improve Financial Decisions: Evaluating the Impact of Financial Education in Mainstream Media," Journal of the European Economic Association, European Economic Association, vol. 15(5), pages 1025-1055.
  • Handle: RePEc:oup:jeurec:v:15:y:2017:i:5:p:1025-1055.
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    File URL: http://hdl.handle.net/10.1093/jeea/jvw021
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    References listed on IDEAS

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    1. Cardoso, Ana Rute & Verner, Dorte, 2007. "Youth Risk-Taking Behavior in Brazil: Drug Use and Teenage Pregnancies," IZA Discussion Papers 3030, Institute of Labor Economics (IZA).
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    Cited by:

    1. repec:eee:deveco:v:134:y:2018:i:c:p:443-466 is not listed on IDEAS
    2. Bruce I. Carlin & Li Jiang & Stephen A. Spiller, 2014. "Learning Millennial-Style," NBER Working Papers 20268, National Bureau of Economic Research, Inc.
    3. repec:oup:wbecrv:v:31:y:2017:i:3:p:611-630. is not listed on IDEAS
    4. Dean Karlan & Aishwarya Lakshmi Ratan & Jonathan Zinman, 2014. "Savings by and for the Poor: A Research Review and Agenda," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(1), pages 36-78, March.
    5. Kaiser, Tim & Menkhoff, Lukas, 2018. "Active Learning Improves Financial Education:," Rationality and Competition Discussion Paper Series 131, CRC TRR 190 Rationality and Competition.
    6. Hoff, Karla & Stiglitz, Joseph E., 2016. "Striving for balance in economics: Towards a theory of the social determination of behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PB), pages 25-57.
    7. Tim Kaiser & Lukas Menkhoff, 2018. "Active Learning Fosters Financial Behavior: Experimental Evidence," Discussion Papers of DIW Berlin 1743, DIW Berlin, German Institute for Economic Research.
    8. Tim Kaiser & Lukas Menkhoff, 2017. "Does Financial Education Impact Financial Literacy and Financial Behavior, and If So, When?," World Bank Economic Review, World Bank Group, vol. 31(3), pages 611-630.
    9. Dalton, Patricio & Rüschenpöhler, Julius & Uras, Burak & Zia, Bilal, 2019. "Local Best Practices for Business Growth," Discussion Paper 2019-015, Tilburg University, Center for Economic Research.
    10. DellaVigna, Stefano & La Ferrara, Eliana, 2015. "Economic and Social Impacts of the Media," CEPR Discussion Papers 10667, C.E.P.R. Discussion Papers.
    11. Viktor Slavtchev & Michael Wyrwich, 2017. "TV and Entrepreneurship," Jena Economic Research Papers 2017-007, Friedrich-Schiller-University Jena.
    12. Calderone, Margherita & Fiala, Nathan & Mulaj, Florentina & Sadhu, Santadarshan & Sarr, Leopold, 2014. "When Can Financial Education Affect Savings Behavior? Evidence From A Randomized Experiment Among Low Income Clients of Branchless Banking in India," Working Papers 32, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    13. Bernard, Tanguy & Dercon, Stefan & Orkin, Kate & Taffesse, Alemayehu, 2014. "The Future in Mind: Aspirations and Forward-Looking Behaviour in Rural Ethiopia," CEPR Discussion Papers 10224, C.E.P.R. Discussion Papers.
    14. Dean Karlan, Aishwarya Lakshmi Ratan, Jonathan Zinman, 2013. "Savings by and for the Poor: A Research Review and Agenda-Working Paper 346," Working Papers 346, Center for Global Development.
    15. B. Ronchini, 2015. "Il ruolo emergente dell'edutainment nei percorsi di educazione finanziaria," Economics Department Working Papers 2015-EF03, Department of Economics, Parma University (Italy).
    16. Tim Kaiser & Lukas Menkhoff, 2018. "Financial Education in Schools: A Meta-Analysis of Experimental Studies," CESifo Working Paper Series 7395, CESifo Group Munich.
    17. Eliana La Ferrara, 2016. "Mass Media And Social Change: Can We Use Television To Fight Poverty?," Journal of the European Economic Association, European Economic Association, vol. 14(4), pages 791-827, August.
    18. Bjorvatn, Kjetil & Cappelen, Alexander W. & Sekei, Linda Helgesson & Sørensen, Erik Ø. & Tungodden, Bertil, 2015. "Teaching through television: Experimental evidence on entrepreneurship education in Tanzania," Discussion Paper Series in Economics 3/2015, Norwegian School of Economics, Department of Economics.

    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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