 Does robo-advisory help reduce the likelihood of carrying a credit card debt? Evidence from an instrumental variable approachJournal of Behavioral and Experimental Finance, 2021, vol. 29, issue C Abstract: The rapid increase in consumer credit card debt has been a major concern in the United States. The emerging robo-advisory, which allows fraud detection and credit spending planning, has shown to be a potential preventive measure for credit card indebtedness. Thus, the present study examines the causal effect of robo-advisory usage on the likelihood of carrying a credit card debt. Instrumental variable regression is carried out on a sample (n = 1762) extracted from the 2015 National Financial Capability Study (NFCS) Investor Survey and State-by-State Survey. Although the present study cannot establish a causal relationship between robo-advisory and carrying a credit card debt, this study shows that fear of investment fraud can be a suitable instrument variable for examining this relationship in future research. Results are robust after controlling for an individual’s demographic factors and variables related to financial literacy that may affect credit card use. Keywords: Financial advice; Credit card debt; Robo-advisory; Financial literacy; Fear of investment fraud (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:29:y:2021:i:c:s2214635021000058 DOI: 10.1016/j.jbef.2021.100461 Access Statistics for this article Journal of Behavioral and Experimental Finance is currently edited by Michael Dowling and Jürgen Huber More articles in Journal of Behavioral and Experimental Finance from Elsevier |
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