This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window

American Economic Journal: Applied Economics: Vol. 6 No. 2 (April 2014)

Expand

Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter Subscription Information
(Institutional Administrator Access)

Explore:

AEJ: Applied - All Issues

AEJ: Applied Forthcoming Articles

Keeping It Simple: Financial Literacy and Rules of Thumb

Article Citation

Drexler, Alejandro, Greg Fischer, and Antoinette Schoar. 2014. "Keeping It Simple: Financial Literacy and Rules of Thumb." American Economic Journal: Applied Economics, 6(2): 1-31.

DOI: 10.1257/app.6.2.1

Abstract

Micro-entrepreneurs often lack the financial literacy required to make important financial decisions. We conducted a randomized evaluation with a bank in the Dominican Republic to compare the impact of two distinct programs: standard accounting training versus a simplified, rule-of-thumb training that taught basic financial heuristics. The rule-of-thumb training significantly improved firms' financial practices, objective reporting quality, and revenues. For micro-entrepreneurs with lower skills or poor initial financial practices, the impact of the rule-of-thumb training was significantly larger than that of the standard accounting training, suggesting that simplifying training programs might improve their effectiveness for less sophisticated individuals.

Article Full-Text Access

Full-text Article

Additional Materials

Online Appendix (28.45 KB) | Download Data Set (448.00 KB) | Author Disclosure Statement(s) (159.30 KB)

Authors

Drexler, Alejandro (U TX)
Fischer, Greg (London School of Economics and Political Science)
Schoar, Antoinette (MIT)

JEL Classifications

D04: Microeconomic Policy: Formulation; Implementation; Evaluation
G21: Banks; Depository Institutions; Micro Finance Institutions; Mortgages
L24: Contracting Out; Joint Ventures; Technology Licensing
L25: Firm Performance: Size, Diversification, and Scope
L26: Entrepreneurship
M41: Accounting
O16: Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

Comments

View Comments on This Article (0) | Login to post a comment


American Economic Journal: Applied Economics


Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

AEJ: Applied - All Issues

AEJ: Applied - Forthcoming Articles

Virtual Field Journals


AEA Member Login:


AEAweb | AEA Journals | Contact Us