Consumer Inattention, Disclosure Reminders, and the Refinancing Channel

This project analyzes data already collected from an experiment conducted by a large retail bank in Ireland in conjunction with the Central Bank of Ireland. Irish regulation mandates that banks send letters to their customers who have mortgages with variable rates that inform them of potentially attractive alternative rates available from that bank. The bank randomized consumers who were set to receive the required disclosure and sent treatment arms enhanced disclosures with varying disclosure design improvements (personalization, graphical representations, color coding, etc.), along with reminder follow-up letters to half the sample. Using data on whether consumers that received various types of disclosures refinanced their mortgage, we study how effective various interventions were and draw lessons about consumer attention and the optimal form of communication from a bank or policymaker to stimulate refinancing.