Information Disclosure and Demand Elasticity of Financial Products : Evidence from a Multi-Country Study
This study tests the effectiveness of behavioral-based disclosure formats. Around 1,700 individuals from Mexico and Peru chose among loans and savings accounts presented in different formats, including a simplified key facts statement (KFS) and cur...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/513631507130361973/Information-disclosure-and-demand-elasticity-of-financial-products-evidence-from-a-multi-country-study http://hdl.handle.net/10986/28455 |
| Summary: | This study tests the effectiveness of
behavioral-based disclosure formats. Around 1,700
individuals from Mexico and Peru chose among loans and
savings accounts presented in different formats, including a
simplified key facts statement (KFS) and current marketing
brochures. The study finds that the price elasticity of
loans is -1.04 using brochures and -3.19 using the
simplified KFS, with smaller effects for savings products.
Finally, while financial literacy is correlated with better
decision-making, the effect of the disclosure format for
loans is about three times as large as that of financial
literacy. More importantly, the KFS helps financially
illiterate individuals relatively more. |
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