Poverty and seeking bank advice: Evidence from a survey experiment

Manthos Delis, Emilios Galariotis, Maria Iosifidi and Jerome Monne

Journal of Financial Stability, 2023, vol. 67, issue C

Abstract: Access to banking services for the poorest individuals is key to reducing their vulnerability, but are poor people likely to seek help from bank advisors? This study tests the hypothesis that poor peoples’ financial concerns affect their willingness to seek professional financial advice from banks. A survey experiment is run by performing “hard priming” (a €2000 car repair expense) on a treatment group and “soft priming” (a €200 expense) on a control group. Overall, hard priming triggers higher positive intention to consult a bank advisor. However, poverty sharply and negatively moderates this effect. For respondents below the poverty line, the priming effect is close to significantly negative and becomes such when restricting the sample to individuals who responded before their payday rather than after it. Hard priming also decreases poor people’s self-reported trust in banks, and this variable mediates the negative effect on intention to consult a bank advisor. There is no evidence that a lack of financial literacy or actual financial distress influence the priming effects.

Keywords: Behavioral economics and finance; Poverty; Salience; Survey experiment; Financial inclusion; Banking services; Financial advisor (search for similar items in EconPapers)
JEL-codes: C83 C9 D14 D90 D91 G40 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finsta:v:67:y:2023:i:c:s1572308923000566

DOI: 10.1016/j.jfs.2023.101156

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