Publication: Information Disclosure and Demand Elasticity of Financial Products: Evidence from a Multi-Country Study
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2017-10
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2017-10-05
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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.
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“Martínez Cuellar, Cristina; Gine, Xavier; Mazer, Rafael Keenan. 2017. Information Disclosure and Demand Elasticity of Financial Products: Evidence from a Multi-Country Study. Policy Research Working Paper;No. 8210. © World Bank. http://hdl.handle.net/10986/28455 License: CC BY 3.0 IGO.”
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