How Materialism Shapes the Effectiveness of Financial Literacy Messages: A Cross‐Cultural Perspective

This cross-cultural experiment (N = 1,000) shows that messages designed to promote financial literacy are differently effective among U.S. and Arab consumers depending on the salience of materialistic thoughts at the time of exposure. Among U.S. consumers, financial literacy messages increased savings intention by heightening the importance of saving when materialistic thoughts were salient but had no impact otherwise. This is consistent with existing research which has largely focused on WEIRD countries (Western, Educated, Industrial, Rich, Democratic; Henrich, Heine, & Norenzayan, 2010). However, among Arab consumers (data collected in the United Arab Emirates), we found that financial optimism was a key construct to explain savings behaviors. Specifically, our results show that financial literacy messages lower levels of financial optimism, and thus, increase savings intention at baseline levels. When materialistic thoughts are salient, our results suggest that Arab consumers prefer spending in the presence of financial literacy messages because having materialistic thoughts heightens financial optimism when one is assured that acquiring financial knowledge and skills guarantees one's financial success.