Financial education represents a powerful tool for improving economic literacy of citizens. This paper presents results from an experiment providing a group of 136 workers in an Italian university ...(administrative staff) an online, synchronous course. Classes were organized in 5 sessions of 2h each and covered basic topics about personal finance. The effectiveness of the course is assessed through a rigorous randomized controlled trial (RCT). In addition to the analysis of improvements in financial knowledge, financial self‐efficacy and the role of prior attitudes and behaviors were explored. Participants obtained post‐test scores statistically higher than individuals in the control group, with an average effect size of 0.55 SD. The effect is particularly relevant for participants starting with low levels of financial knowledge. Moreover, two novel findings emerge: financial self‐efficacy increases (0.51 SD) after the course, and pre‐treatment individuals' financial attitudes and behaviors shed further light on the financial learning process.
Gaining financial independence is considered a key component of the transition to adulthood. Yet we know little about how adolescents learn to navigate the financial world or how social class shapes ...this process. Drawing on interviews with 52 parents and adolescents in the United States, this study explored how children learn about finances from their parents. Middle-class parents in the sample were more proactive in teaching their children about finances. Working-class parents, however, often felt unequipped to teach financial skills and were more likely to shelter their children from financial matters. Ultimately, middle-class adolescents felt more at ease when navigating financial institutions, while working-class adolescents expressed greater uncertainty and were left to grapple with imperfect and sometimes contradictory information about finances.
We quantify fluctuations in bank-loan supply in the time-series by studying firms' substitution between loans and bonds using firm-level data. Any firm that raises new debt must have a positive ...demand for external funds. Conditional on the issuance of new debt, we interpret firms' switching from loans to bonds as a contraction in bank-credit supply. We find strong evidence of this substitution at times that are characterized by tight lending standards, depressed aggregate lending, poor bank performance, and tight monetary policy. We show that this substitution behavior has strong predictive power for bank borrowing and investments by small firms.
•We propose a time-series measure of bank-loan supply conditions.•Firm substitution between loans and bonds is the best measure of conditions of loan supply.•This measure is a strong predictor of conditions of loan supply for small, out-of-sample firms.•This measure also predicts investments for small firms.
With the rise of populism in many countries, including Germany, it is more important than ever to better understand the causes and consequences of populist support. Using two experiments within the ...context of a large panel survey, we study how support for the German right-wing populist party Alternative für Deutschland (AfD) is associated with subjective perceptions of personal and financial well-being. In both experiments, we rely on priming the identity of AfD supporters, once in a controlled manner and once in a natural setting. We document a causal relationship from AfD support to diminished well-being for new and marginal AfD supporters. Our findings challenge the prevailing assumption that causality moves unidirectionally, from life dissatisfaction to support for populist parties, and suggest that early interventions focusing on positive messages are particularly promising to win voters back into the mainstream.
Rolling Mental Accounts Frydman, Cary; Hartzmark, Samuel M.; Solomon, David H.
The Review of financial studies,
01/2018, Volume:
31, Issue:
1
Journal Article
Peer reviewed
When investors sell one asset and quickly buy another (“reinvestment days”), their trades suggest the original mental account is not closed, but is instead rolled into the new asset. Retail investors ...trading on their own accounts display a rolled disposition effect, selling the new position when its value exceeds the initial investment in the original position. On reinvestment days, these investors display no disposition effect (consistent with no disutility from realizing a loss) and make better selling decisions. Using a laboratory experiment, we show that reinvestment causally reduces the disposition effect and improves trading.
Background
A growing proportion of cancer survivors experience financial toxicity. However, the psychological burden of cancer costs and associated mental health outcomes require further ...investigation. We assessed prevalence and predictors of self-reported financial worry and mental health outcomes among cancer survivors.
Patients and methods
Data from the 2013–2018 National Health Interview Survey (NHIS) for adults reporting a cancer diagnosis were used. Multivariable ordinal logistic regressions defined adjusted odds ratios (AORs) of reporting financial worry by relevant sociodemographic variables, and sample weight-adjusted prevalence of financial worry was estimated. The association between financial worry and psychological distress, as defined by the six-item Kessler Psychological Distress Scale was also assessed.
Results
Among 13,361 survey participants (median age 67; 60.0% female), 9567 (71.6%) self-reported financial worry, including worries regarding costs of paying for children’s college education (62.7%), maintaining one’s standard of living (59.7%), and medical costs due to illness or accident (58.3%). Female sex, younger age, and Asian American race were associated with increased odds of financial worry (
P
< 0.05 for all). Of 13,218 participants with complete responses to K6 questions, 701 (5.3%) met the threshold for severe psychological distress. Participants endorsing financial worry were more likely to have psychological distress (6.6 vs. 1.2%, AOR 2.89, 95% CI 2.03–4.13,
P
< 0.001) with each additional worry conferring 23.9% increased likelihood of psychological distress.
Conclusions
A majority of cancer survivors reported financial worry, which was associated with greater odds of reporting psychological distress. Policies and guidelines are needed to identify and mitigate financial worries and psychologic distress among patients with cancer, with the goal of improving psychological well-being and overall cancer survivorship care.
I empirically analyze how changes in access to housing collateral affect homeowner borrowing behavior. To isolate the role of collateral constraints from that of wealth effects, I exploit the fully ...anticipated expiration of resale price controls on owner-occupied housing in Montgomery County, Maryland. I estimate a marginal propensity to borrow out of housing collateral that ranges between $0.04 and $0.13 and is correlated with homeowners' initial leverage. Additional analysis of residential investment and ex-post loan performance indicates that some of the extracted funds generated new expenditures. These results suggest a potentially important role for collateral constraints in driving household expenditures.
Why do prime ministers or presidents appoint non‐elected experts, also known as technocrats, during economic crises? Do they appoint them for their expertise or for their commitment to pro‐market ...reforms? Answering this question is crucial for understanding and predicting the longer‐term role of technocrats in democracies. With the aid of unique data on the political and personal background of finance ministers in 13 parliamentary and semi‐presidential European democracies this article shows that commitment, not expertise is the primary driver of technocratic appointments during major economic crises. Technocrats are preferred over experienced politicians when the latter lack commitment to policy reform. An important implication of the findings is that technocratic appointments to top economic portfolios in West European countries are unlikely to become the norm outside economic crises, assuming economic crises are short‐lived and not recurring.
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