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Limited and Varying Consumer Attention: Evidence from Shocks to the Salience of Bank Overdraft Fees

Victor Stango and Jonathan Zinman ()

No 17028, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We explore dynamics of limited attention in the $35 billion market for checking overdrafts, using survey content as shocks to the salience of overdraft fees. Conditional on selection into surveys, individuals who face overdraft-related questions are less likely to incur a fee in the survey month. Taking multiple overdraft surveys builds a "stock" of attention that reduces overdrafts for up to two years. The effects are significant among consumers with lower education and financial literacy. Individuals avoid overdrafts by making fewer low-balance debit transactions and cancelling automatic recurring withdrawals. The results raise new questions about consumer financial protection policy.

JEL-codes: D14 D18 G13 G21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mkt
Date: 2011-05
Note: LE
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Published as Victor Stango & Jonathan Zinman, 2014. "Limited and Varying Consumer Attention: Evidence from Shocks to the Salience of Bank Overdraft Fees," Review of Financial Studies, vol 27(4), pages 990-1030.

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Related works:
Journal Article: Limited and Varying Consumer Attention: Evidence from Shocks to the Salience of Bank Overdraft Fees (2014) Downloads
Working Paper: Limited and varying consumer attention: evidence from shocks to the salience of bank overdraft fees (2011) Downloads
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