Arbeitspapier
Time inconsistency and overdraft use: Evidence from transaction data and behavioral measurement experiments
Households regularly fail to make optimal financial decisions. But what are the underlying reasons for this? Using two conceptually distinct measures of time inconsistency based on bank account transaction data and behavioral measurement experiments, we show that the excessive use of bank account overdrafts is linked to time inconsistency. By contrast, there is no correlation between a survey-based measure of financial literacy and overdraft usage. Our results indicate that consumer education and information may not suffice to overcome mistakes in households' financial decision-making. Rather, behaviorally motivated interventions targeting specific biases in decision-making should also be considered as effective policy tools.
- Language
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Englisch
- Bibliographic citation
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Series: SAFE Working Paper ; No. 347
- Classification
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Wirtschaft
Household Saving; Personal Finance
Micro-Based Behavioral Economics: General‡
- Subject
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Household Finance
Paycheck Sensitivity
Fintech
Time Inconsistency
Time Preferences
Experiment
Behavioral Measurement
- Event
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Geistige Schöpfung
- (who)
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Gill, Andrej
Hett, Florian
Tischer, Johannes
- Event
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Veröffentlichung
- (who)
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Leibniz Institute for Financial Research SAFE
- (where)
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Frankfurt a. M.
- (when)
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2022
- Handle
- Last update
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10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Gill, Andrej
- Hett, Florian
- Tischer, Johannes
- Leibniz Institute for Financial Research SAFE
Time of origin
- 2022