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The impact of financial education on adolescents' intertemporal choices

Author

Listed:
  • Melanie Lührmann

    (Institute for Fiscal Studies and Royal Holloway, University of London)

  • Marta Serra-Garcia

    (Institute for Fiscal Studies)

  • Joachim K. Winter

    (Institute for Fiscal Studies and Ludwig-Maximilians-Universität München)

Abstract

We study the impact of financial education on intertemporal choice in adolescence. The program was randomly assigned among high-school students and intertemporal choices were measured using an incentivized experiment. Students who participated in the program display a decrease in time inconsistency; an increase in the allocation of payment to a single payment date, compared to spreading payment across two dates; and increased consistency of choice with the law of demand. These findings suggest that the effect of such educational programs is to increase comprehension and decrease bracketing in intertemporal choice. This working paper was updated in May 2015.

Suggested Citation

  • Melanie Lührmann & Marta Serra-Garcia & Joachim K. Winter, 2014. "The impact of financial education on adolescents' intertemporal choices," IFS Working Papers W14/18, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:14/18
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    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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