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Financial (dis-)information : evidence from an audit study in Mexico

Author

Listed:
  • Gine, Xavier
  • Martinez Cuellar, Cristina
  • Mazer, Rafael Keenan

Abstract

An audit study was conducted in peri-urban Mexico to understand the quality of information and products offered to low-income potential customers. Trained auditors visited multiple financial institutions seeking credit and savings products. Consistent with Gabaix and Laibson (2006), staff voluntarily provides little information about avoidable fees, especially to auditors trained to reveal little knowledge about the market. In addition, clients are almost never offered the cheapest product, most likely because staff is incentivized to offer more expensive products that are thus more profitable to the institution. This suggests that disclosure and transparency policies may be ineffective if they undermine the commercial interest of financial institutions.

Suggested Citation

  • Gine, Xavier & Martinez Cuellar, Cristina & Mazer, Rafael Keenan, 2014. "Financial (dis-)information : evidence from an audit study in Mexico," Policy Research Working Paper Series 6902, The World Bank.
    • Handle: RePEc:wbk:wbrwps:6902
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    References listed on IDEAS

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    Cited by:

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    3. Orazio Attanasio & Matthew Bird & Lina Cardona-Sosa & Pablo Lavado, 2019. "Freeing Financial Education via Tablets: Experimental Evidence from Colombia," NBER Working Papers 25929, National Bureau of Economic Research, Inc.

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    Keywords

    Financial Literacy; Access to Finance; Banks&Banking Reform; Insurance&Risk Mitigation; Emerging Markets;
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