Information disclosure and demand elasticity of financial products: evidence from a multi-country study

Xavier Gine, Cristina Martínez Cuellar, Rafael Keenan Mazer, Xavier Gine, Cristina Martínez Cuellar and Rafael Keenan Mazer
Authors registered in the RePEc Author Service: Xavier Gine

No 8210, Policy Research Working Paper Series from The World Bank

Abstract: This study tests the effectiveness of behavioral-based disclosure formats. Around 1,700 individuals from Mexico and Peru chose among loans and savings accounts presented in different formats, including a simplified key facts statement (KFS) and current marketing brochures. The study finds that the price elasticity of loans is -1.04 using brochures and -3.19 using the simplified KFS, with smaller effects for savings products. Finally, while financial literacy is correlated with better decision-making, the effect of the disclosure format for loans is about three times as large as that of financial literacy. More importantly, the KFS helps financially illiterate individuals relatively more.

Keywords: Financial Literacy; Legal Institutions of the Market Economy; Educational Sciences; Private Sector Economics; Marketing; Private Sector Development Law; Access to Finance (search for similar items in EconPapers)
Date: 2017-10-04
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Citations: View citations in EconPapers (6)

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