Financial literacy and economic preferences – an intervention study in schools

Last registered on May 04, 2018

Pre-Trial

Trial Information

General Information

Title
Financial literacy and economic preferences – an intervention study in schools
RCT ID
AEARCTR-0002953
Initial registration date
May 04, 2018
Last updated
May 04, 2018, 3:54 PM EDT

Locations

Region

Primary Investigator

Affiliation
Max Planck Institute for Research on Collective Goods

Other Primary Investigator(s)

PI Affiliation
PH Ludwigsburg
PI Affiliation
University Siegen
PI Affiliation
Max Planck Institute for Research on Collective Good, University of Cologne

Additional Trial Information

Status
On going
Start date
2017-05-12
End date
2019-06-30
Secondary IDs
Abstract
Being financial literate describes the individual capability to handle financial aspects of everyday life and to make meaningful and informed decisions regarding saving and consumption. Financial literacy is considered an essential life skill by the OECD (2017). Nevertheless, approximately half of the German population is not able to give correct answers to simple questions regarding financial literacy (Bucher-Koenen & Lusardi, 2011). At the same time, German schools rarely teach financial literacy at school (Plickert, 2016). This is especially problematic, as teenagers will in the future increasingly have to deal with questions regarding financial products and retirement savings.

Our project aims at, first, improving students’ financial literacy. We, hence, develop a school intervention fostering financial literacy. We run a financial literacy test before and after this intervention in order to quantify students’ learning. We focus on short-term learning by running the test directly after the intervention, and long-term learning by running the test at least six months after our intervention. In order to control for test familiarity we also ask students who did not get training in the field of financial literacy (our control group and our monetary policy group) to complete the test. Our hypothesis is that our financial literacy intervention improves financial literacy in the short and long run.

We, secondly, want to learn if students – who were taught in financial literacy – make less risky and more patient choices than students who got no teaching (control group) or were taught in other fields (we additionally run an intervention on monetary policy). So far, there exists little evidence on whether and how financial literacy affects economic preferences and whether better economic decision-making might result from better financial literacy. We concentrate on risk and time preferences, as they have proven especially relevant for people’s success in life. Less risk averse and more patient individuals display, for instance, higher levels of education, perceive higher salaries, enjoy better health and carry out less often criminal activity (Moffitt et al., 2011; Dohmen et al., 2012; Sutter et al., 2013;). It is, hence, important to learn how patient and risk neutral behavior in students can be encouraged. We hypothesize that financial literacy affects individual risk and time preferences and improves economic decision making of students in the short and long run.
External Link(s)

Registration Citation

Citation
, et al. 2018. "Financial literacy and economic preferences – an intervention study in schools." AEA RCT Registry. May 04. https://doi.org/10.1257/rct.2953-1.0
Former Citation
, et al. 2018. "Financial literacy and economic preferences – an intervention study in schools." AEA RCT Registry. May 04. https://www.socialscienceregistry.org/trials/2953/history/29131
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2017-05-12
Intervention End Date
2018-12-31

Primary Outcomes

Primary Outcomes (end points)
- Financial literacy (FL) and monetary policy knowledge (MP) measured by the number of correct answers given in a FL and MP test: before, directly after and min. six months after our intervention
- Risk and time preferences measured by the number of riskless and patient choices of students: before, directly after and min. six months after our intervention
- Inconsistencies in risk and time preferences measured by the percentage of inconsistent answers given: before, directly after and min. six months after our intervention
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
11 schools and 33 school classes will be invited to participate in our study. In each school one class will be part of a school intervention fostering financial literacy (FL treatment), another class will be part of a school intervention on monetary policy (MP treatment), and a third class will get no training (control). The school interventions will require about eight school lessons and will take place during regular schooling hours.

We will measure students’ knowledge regarding FL and MP before the intervention (pre-knowledge), directly after the intervention (short-term learning) and at least six months after the intervention (long-term learning). At approximately the same points in time, we will run economic experiments with the students (see Sutter et al., 2013 for the measurement of time and risk preferences).

Experimental Design Details
Randomization Method
Classes will be randomly allocated to treatments by teachers.
Randomization Unit
Class level
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
We will run our study in 11 schools. In each school, we will invite three classes to participate in our study. This means, that overall 33 classes will participate in our study.
Sample size: planned number of observations
We will run our study with approx. 600 students.
Sample size (or number of clusters) by treatment arms
We will have 11 classes being part of an intervention on financial literacy, 11 classes being part of an intervention on monetary policy, and 11 classes being part of no intervention.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
Board for Ethical Questions in Science of the University of Innsbruck
IRB Approval Date
2016-04-12
IRB Approval Number
38/2016

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials