Cultivating Self-Control in FinTech: Evidence from a Field Experiment on Online Consumer Borrowing

Di Bu, Tobin Hanspal, Yin Liao and Yong Liu

Journal of Financial and Quantitative Analysis, 2022, vol. 57, issue 6, 2208-2250

Abstract: We report the results of a longitudinal intervention with students across 5 universities in China designed to reduce online consumer debt. We allocate participants to either a financial literacy treatment group, a self-control treatment group, or a zero-touch control group. Our self-control training intervention features detailed tracking of spending and borrowing, budgeting, and introspection about consumption choices. This intervention reduces online borrowing and delinquency charges, mainly driven by a reduction in entertainment-related spending and borrowing. In contrast, financial literacy interventions improve test scores but only marginally affect borrowing. Our results suggest that cultivating self-regulation and budgeting skills can improve borrowing behavior on e-commerce platforms.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:cup:jfinqa:v:57:y:2022:i:6:p:2208-2250_5

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