Financial Literacy Education and Behaviour Unhinged: Combating Bias and Poor Product Design

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Title Financial Literacy Education and Behaviour Unhinged: Combating Bias and Poor Product Design
Author West, Jason
Journal Name International Journal of Consumer Studies
Year Published 2012
Place of publication United Kingdom
Publisher Blackwell Publishing
Abstract The growth of products available in the consumer financial market has provided more choice and formal control over household financial decisions than ever before. Financial literacy education programs are generally assumed to improve consumer behaviour in relation to financial products and services. However there is scant evidence that demonstrates the causal link between education, literacy and behaviour. Through the use of a sample study we show that the actions of individuals who are financially literate does not necessarily mean they will demonstrate good financial behaviour. We propose that in order to improve the financial behaviour of consumers two critical areas need to be addressed. Firstly the objectives of financial literacy programs should be to not only educate consumers about financial markets and products but highlight to individuals the psychological biases and limitations that they as humans, cannot easily avoid. Secondly the regulation of financial products sold to consumers needs alteration to meet the aim of protecting retail consumers from complex financial products that are confusing, ambiguous and inappropriate. We propose regulation and redesign of product information offerings using techniques employed in ecological interface design models to derive a suitability test for consumer financial products.
Peer Reviewed Yes
Published Yes
Alternative URI http://dx.doi.org/10.1111/j.1470-6431.2012.01118.x
Copyright Statement Copyright 2012 Blackwell Publishing Ltd. This is the pre-peer reviewed version of the following article: Financial Literacy Education and Behaviour Unhinged: Combating Bias and Poor Product Design, International Journal of Consumer Studies, Vol. 36(5), 2012, pp. 523-530, which has been published in final form at dx.doi.org/10.1111/j.1470-6431.2012.01118.x.
Volume 36
Issue Number 5
Page from 523
Page to 530
ISSN 1470-6423
Date Accessioned 2012-10-10
Language en_US
Faculty Griffith Business School
Subject Finance
URI http://hdl.handle.net/10072/47676
Publication Type Journal Articles (Refereed Article)
Publication Type Code c1

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