Keeping it Simple: Financial Literacy and Rules of Thumb
Individuals and business owners engage in an increasingly complex array of financial decisions that are critical for their success and well-being. Yet a growing literature documents that in both developed and developing countries, a large fraction of the population is unprepared to make these decisions. Evidence on potential remedies is limited and mixed. Two randomized trials test the impact of financial training on firm-level and individual outcomes for microentrepreneurs in the Dominican Republic. We find no significant effect from a standard, fundamentals-based accounting training. However, a simplified, rule-of-thumb training produced significant and economically meaningful improvements in business practices and outcomes.
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- Lars Ivar Oppedal Berge & Kjetil Bjorvatn & Kartika Sari Juniwaty & Bertil Tungodden, 2012. "Business Training in Tanzania: From Research-driven Experiment to Local Implementation-super- †," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 21(5), pages -827, November.
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