To measure the impact of access to personalized, just-in-time information from a credit price comparison tool on consumer beliefs, search, and loan characteristics, we are conducting a randomized control trial (RCT) with the CMF (Chilean financial regulator).
The target sample group is adults searching for a consumer loan or mortgage in Google. To recruit participants, we have identified a set of Google search keywords related to consumer loans and have designed a Google ads campaign that will target Chilean residents searching for consumer loans online. We expect 147,000 people to click our ads, which translates to 28,673 participants (19.5%) being assigned to a treatment arm, based on our pilot data. When loan searchers click our ads, this leads them to our online survey questionnaire. If they provide informed consent, they enter into the initial part of the survey, which asks about sociodemographic characteristics, loan characteristics, and beliefs about the credit market. After completing this initial part, participants are randomized into one of the six treatment arms. After treatment, we ask again about the beliefs about the credit market to measure whether they change subsequently. The total survey duration is of 9 minutes on average.
We have three treatment arms in our RCT, which are described below:
1) Full price comparison tool: it allows users to enter information about their income and the loan type (consumer or mortgage), maturity, amount, and municipality they would like to search. Using CMF's administrative data on the universe of consumer and mortgage loans over the last six months, the interactive tool shows the distribution of APRs that other consumers with similar characteristics received from banks for similar loans. User characteristics are based on the income and municipality tool inputs, and loan characteristics are based on the loan type, amount, and maturity tool inputs.
2) Simplified price comparison tool: the inputs are the same as in the full version of the tool. This simplified version shows users the benefits of search by returning users a statement of how much they would save in terms of monthly and total costs by searching at more banks, conditional on loan and consumer inputs.
3) Control group video: it explains basic financial concepts about credits and does not provide information about the search and comparison of loans across banks.
We will also test whether asking people about search induces more search by randomly not asking these questions to a fraction (25%) of our respondents—more on this in the power calculations section.