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Evaluating deliberative competence: a simple method with an application to financial choice


Ambuehl, Sandro; Bernheim, B. Douglas; Lusardi, Annamaria (2021). Evaluating deliberative competence: a simple method with an application to financial choice. Discussion Paper Series 15863, Centre for Economic Policy Research.

Abstract

We introduce a method for experimentally evaluating interventions designed to improve the quality of choices in settings where people imperfectly comprehend consequences. Among other virtues, our method yields an intuitive sufficient statistic for welfare that admits formal interpretations even when consumers suffer from biases outside the scope of analysis. We use it to study a financial education intervention, which we find improves the quality of decisions only when it incorporates practice and feedback, contrary to the implications of analyses based on conventional efficacy metrics. We trace the failures of conventional metrics to violations of assumptions that our method avoids.

Abstract

We introduce a method for experimentally evaluating interventions designed to improve the quality of choices in settings where people imperfectly comprehend consequences. Among other virtues, our method yields an intuitive sufficient statistic for welfare that admits formal interpretations even when consumers suffer from biases outside the scope of analysis. We use it to study a financial education intervention, which we find improves the quality of decisions only when it incorporates practice and feedback, contrary to the implications of analyses based on conventional efficacy metrics. We trace the failures of conventional metrics to violations of assumptions that our method avoids.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:C91, D04, D14, D60, D91, I21
Language:English
Date:1 March 2021
Deposited On:31 Aug 2021 11:30
Last Modified:31 Aug 2021 12:06
Series Name:Discussion Paper Series
Number of Pages:111
ISSN:0265-8003
OA Status:Green
Free access at:Official URL. An embargo period may apply.
Official URL:https://cepr.org/active/publications/discussion_papers/dp.php?dpno=15863#

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