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Do heuristics matter for financial literacy? The impact of better heuristics awareness to financial literacy

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  • Pitthan, Francisco
  • De Witte, Kristof

Abstract

Policymakers are increasingly focused on improving citizens’ financial well-being through better financial literacy. Traditional strategies emphasize financial education to boost financial knowledge, while recently behavioural-based education focus on issues like behavioural biases and emotional influences. This paper suggests a randomized controlled-study to assess if financial education including lessons on heuristics (availability and gambler’s fallacy) enhances financial literacy. Results showed that traditional financial education significantly improved financial literacy, while adding heuristics had effect close to zero. This suggests expanding curricula to address rules-of-thumb may not necessarily improve financial literacy, challenging the notion that more complex financial education is always beneficial.

Suggested Citation

  • Pitthan, Francisco & De Witte, Kristof, 2024. "Do heuristics matter for financial literacy? The impact of better heuristics awareness to financial literacy," Finance Research Letters, Elsevier, vol. 67(PB).
    • Handle: RePEc:eee:finlet:v:67:y:2024:i:pb:s1544612324008845
    DOI: 10.1016/j.frl.2024.105854
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