Impact of financial literacy education on personal financial decision making
Last registered on May 14, 2014


Trial Information
General Information
Impact of financial literacy education on personal financial decision making
Initial registration date
Not yet registered
Last updated
May 14, 2014 5:34 PM EDT
Primary Investigator
Other Primary Investigator(s)
PI Affiliation
McKinsey and Company
PI Affiliation
The World Bank
PI Affiliation
University of California at Berkeley
Additional Trial Information
On going
Start date
End date
Secondary IDs
Although vast resources have been directed towards financial education programs aimed at improving poor financial knowledge and outcomes in developing countries, there is little rigorous evidence, to date, on the impact of these programs on financial behavior. In this trial, with a sample of 1,300 individuals in India, we measure the effect of a 5-week financial education program on financial numeracy, awareness, attitudes, and outcomes through a survey and financial knowledge test administered to all study participants 2-3 weeks after the program. In addition, we test the importance of goal setting and financial counseling within a subset of the population treated with the financial education program.
External Link(s)
Registration Citation
Carpena, Fenella et al. 2014. "Impact of financial literacy education on personal financial decision making." AEA RCT Registry. May 14.
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Experimental Details
We study the following four treatments, all randomly assigned at the individual level: (1) video-based financial literacy education, (2) paying participants for performance on an exit test (“pay for performance”), (3) financial counseling, and (4) financial goal setting. We discuss each of these interventions in more detail below.

* Financial Education
Participants in this treatment were invited to attend a video-based financial literacy training program. The financial education videos include the following five topics: budgeting, savings, loans, insurance, and a final summary video. To avoid bias from Hawthorne-type effects, the control group was assigned to watch health education videos. These health training videos cover information unrelated to financial literacy, specifically: cleanliness and hygiene; midwife, maternal and child health; condoms, AIDS and syphilis; and night-blindness.

* Pay for Performance
In this treatment, monetary incentives were provided to participants based on their performance on a follow up survey. The survey was administered to the respondent’s household 2 to 3 weeks after the final video training session. It consisted of both financial and health literacy test questions, all drawn directly from the video training. Respondents receive Rs. 10 for each question that they answer correctly, but we vary which questions individuals are compensated for. Specifically, half the participants, selected individually at random, and independent of their financial education treatment status, are paid for correct answers to questions related to the videos they watched (i.e. health training participants receive compensation for health test questions, and similarly for financial literacy training participants). The other half are paid for correct answers to questions that are not covered in their video training (i.e. financial literacy training participants get paid for health or general knowledge test questions, and vice versa).

* Goal Setting
Individuals in this treatment received a household visit and are first asked about whether they currently use, or plan to use, financial services and financial planning tools. Next, they are asked to set a target date for several financial planning goals (i.e. opening a savings account, increasing savings, reducing expenditure, purchasing insurance). These target dates are then marked on a calendar provided to respondents at no cost.

* Counseling
Those in this group received an offer of financial counseling, independent of their goal setting treatment status. Specifically, financial counselors visited the counseling treatment group in their home to provide individualized financial counseling services. The financial counselors assisted participants on several issues—including but not limited to preparing a budget, opening a bank account, paying off or re-financing loans, purchasing an insurance policy—depending on their needs. Financial counselors were trained rigorously by our partner research organization in India, the Center for Microfinance, prior to visiting respondents.
Intervention Start Date
Intervention End Date
Primary Outcomes
Primary Outcomes (end points)
The outcomes we study are the following: (1) financial numeracy, i.e., respondents’ skill in calculating interest rates, adding income, and similar computations; (2) financial awareness, i.e., respondents’ knowledge and awareness about basic financial products and financial planning tools, such as a budget, savings account details, and loan processing fees; (3) financial attitudes, i.e., respondents’ individual perspectives about the benefits of and attitudes towards financial products and financial planning tools; (4) persistence of changes in financial numeracy, awareness, and attitudes over time; (4) financial behavior and financial outcomes, such income, expenditure, use of formal and informal financial services, use of financial planning tools.

Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
The population for our study consists of over 1,300 urban poor households in Ahmedabad, a metropolitan city in the state of Gujarat, India. To manage the large sample size, we conduct the study in 4 waves. Each wave draws from different neighborhoods. Furthermore, all respondents are associated with Saath, our non-government partner organization. About half are clients of Saath’s microfinance services, while the other half are participants of Saath’s other urban development programs such as livelihood training.

The experimental design involves four interventions, all randomly assigned at the individual level. First, for the financial education intervention, a randomly selected 2/3 of the full sample was invited to a video-based financial education program, while the remaining 1/3 was invited to watch health information videos.

Second, a pay for performance treatment was also implemented, where half of all study participants, selected individually at random and independent of their financial education treatment status, were paid for correct answers to questions related to the videos they watched (i.e. health information participants received compensation for health test questions, and financial literacy participants received compensation for financial test questions). The other half were paid for correct answers to questions that were not covered in their video training (i.e. financial literacy participants got paid for health test questions, and vice versa).

Third, a goal setting intervention was administered to respondents who received the financial education treatment. Among this pool, half the sample was randomly selected to receive the goal setting treatment, while the remaining half formed the control group.

Finally, a counseling treatment was assigned only to those participants who received the financial training treatment. Among these respondents, half were randomly selected to receive an offer of financial counseling, independent of their goal setting treatment status.

Experimental Design Details
Randomization Method
Randomization was carried out using a Stata program.
Randomization Unit
Was the treatment clustered?
Experiment Characteristics
Sample size: planned number of clusters
Not applicable
Sample size: planned number of observations
1328 individuals
Sample size (or number of clusters) by treatment arms
* Financial Literacy
Treatment: 886
Control: 442

* Pay for Performance
Treatment: 665
Control: 663

* Counseling
Treatment: 445
Control: 883

* Goal Setting
Treatment: 439
Control: 889

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB Name
Harvard Business School
IRB Approval Date
IRB Approval Number
17663 (HBS)
Post Trial Information
Study Withdrawal
Is the intervention completed?
Is data collection complete?
Data Publication
Data Publication
Is public data available?
Program Files
Program Files
Reports, Papers & Other Materials
Relevant Paper(s)