مفاهیم اقتصاد رفتاری برای سواد مالی و سیاست های عمومی

This paper summarizes and highlights different methodological approaches to behavioural economics in the context of the conventional economic wisdom and the implications of these different methodological approaches for financial literacy, related institutional change, and public policy. Conventional economics predicts no substantive improvement from improvements to financial literacy. The errors and biases approach to behavioural economics suggests limited improvements to decision making from financial education as errors and biases are largely hardwired in the brain. Government and expert intervention affecting individual choice behaviour is recommended. The evidence suggests that the bounded rationality approach to behavioural economics, with its focus on smart decision makers and the importance institutional and environment constraints on decision making, is the most promising lense through which to analyse financial decision making. From this perspective, financial decision making can be improved by providing decision makers with better quality information presented in a non-complex fashion, an institutional environment conducive to good decisions, an incentive structure that internalize externalities involved in financial decision making, and financial education that will facilitate making the best use of the information at hand within a specific decision-making environment.

A standard definition of financial literacy is “having the knowledge, skills and confidence to make responsible financial decisions.” The institutional environment is also important to financial decision making and greatly affects choices, influencing the extent and quality of relevant information and incentives. Financial literacy is of increasing concern to government and other public policy makers. Surveys in OECD countries find that financial literacy is very low amongst individuals and households irrespective of income and education, but especially amongst groups with lower income and less education. Even stock ownership and trading in financial assets do not appear to improve the level of financial literacy. Most people have difficulty answering questions about compound interest, inflation, or risk diversification, and have difficulty understanding budgeting and saving programs and financial information in general. This appears to be the case in Canada, the United States, the United Kingdom, Australia, New Zealand, Korea, and the Netherlands (Munshaw, 2008, OECD, 2005 and Yoong, 2010). Serious gaps in financial literacy are of mounting concern, with the increasing number of financial products and services on the market, their increased complexity, and the escalating importance of financial decision-making to individuals and society at large, especially as life expectancy is increasing. The topic of financial literacy raises the issue of the potential role that might be played by education, quality information, and incentives in improving decisions. It can be argued that with a less than ideal education, information sets, and incentives, individuals cannot make the best decisions. By contributing to financial literacy, financial education should contribute to more informed and effective decisions on financial matters such as contributions to pensions, use of credit cards, household budgeting, mortgages, and investing on the stock market. Improvements to relevant information, with a focus on quality (and truthfulness), make possible the effective use of financial education. Financial education and quality information go hand and hand, forming key ingredients to effective financial literacy (Lusardi and Mitchell, 2007). This perspective on financial literacy, I would argue, runs contrary to the standard economic wisdom. It presumes that individuals have the physiological and psychological capabilities, and are in an informational, governance, and social environment, that will allow them to make optimal decisions. If the typical individual is so endowed, financial education can have little impact on improving choices. In effect, one might argue that in the conventional approach individuals either are assumed to be financially literate or that they make choices consistent with financial literacy. Financial literacy can be improved only if individuals persistently make unwise choices that can be corrected by interventions in the decision-making process or in the decision-making environment. But this possibility is assumed away by the conventional wisdom. Research in behavioural economics suggests quite different behavioural and institutional assumptions. There are two key perspectives in behavioural economics that yield distinct implications for financial literacy and financial education (Altman, 2008), both of which deny that individuals typically behave as rationally as assumed by conventional economics. Behavioural economics also questions the conventional assumption that the environment in which financial decisions are make is necessarily ideal (Altman, 2012). This article discusses the implications of the two approaches of behavioural economics for possible improvements to financial literacy and, therefore, to financial decision making. What I refer to as the Kahneman–Tversky approach maintains that individuals often make systematic errors and biases in decision making that are largely rooted in the hard-wiring of the brain. Errors and biases occur when individuals deviate from conventional (neoclassical) decision-making rules. Education can have little effect on such behaviour. This approach is much more supportive of government policy that nudges consumers into making decisions that some might argue are in the best interest of consumers. Experts are assumed to know better than individual decision makers what is in their best interest (Thaler and Sunstein, 2003 and Thaler and Sunstein, 2008; see also Camerer et al., 2003, de Meza et al., 2008, Shefrin, 2002, Thaler, 1980 and Thaler, 2000; see Sugden, 2008 and Sugden, 2009, for a critique of Thaler and Sunstein). What I refer to as the Simon–March approach, argues that individuals are physiologically incapable of behaving as prescribed and predicted by conventional economic wisdom. As a result, they develop heuristics, or experience-based decision-making shortcuts, to make choices that are rational even though often inconsistent with the conventional behavioural norms. It is also recognized that the typical choice environment is characterized by asymmetric information, incomplete information, and even false information and poor education. Both physiological and environmental constraints can, but need not, result in errors in decision making, such as relatively poor investment decisions. Because choice environments can be changed, this approach provides a much stronger rationale for enhancing the quality of financial decision making through improvements to financial education and the decision-making environment. This would include improved access to and improved availability of quality and pertinent information, appropriate decision-making rules and regulations, and appropriate financial education. On the whole, individual preferences, which are regarded as multi-faceted across decision makers, are respected and less attention is paid to nudging unless individual choices can be shown to cause social harm (negative externalities). This perspective is well reflected in the research of Shiller, 2001, Shiller, 2008, Shiller, 2009 and Shiller, 2010, a leading behavioural finance scholar. These different approaches to financial decision-making are summarized in Table 1.

A standard definition of financial literacy is “having the knowledge, skills and confidence to make responsible financial decisions.” The institutional environment is also important to financial decision making and greatly affects choices, influencing the extent and quality of relevant information and incentives. Financial literacy is of increasing concern to government and other public policy makers. Surveys in OECD countries find that financial literacy is very low amongst individuals and households irrespective of income and education, but especially amongst groups with lower income and less education. Even stock ownership and trading in financial assets do not appear to improve the level of financial literacy. Most people have difficulty answering questions about compound interest, inflation, or risk diversification, and have difficulty understanding budgeting and saving programs and financial information in general. This appears to be the case in Canada, the United States, the United Kingdom, Australia, New Zealand, Korea, and the Netherlands (Munshaw, 2008, OECD, 2005 and Yoong, 2010). Serious gaps in financial literacy are of mounting concern, with the increasing number of financial products and services on the market, their increased complexity, and the escalating importance of financial decision-making to individuals and society at large, especially as life expectancy is increasing. The topic of financial literacy raises the issue of the potential role that might be played by education, quality information, and incentives in improving decisions. It can be argued that with a less than ideal education, information sets, and incentives, individuals cannot make the best decisions. By contributing to financial literacy, financial education should contribute to more informed and effective decisions on financial matters such as contributions to pensions, use of credit cards, household budgeting, mortgages, and investing on the stock market. Improvements to relevant information, with a focus on quality (and truthfulness), make possible the effective use of financial education. Financial education and quality information go hand and hand, forming key ingredients to effective financial literacy (Lusardi and Mitchell, 2007). This perspective on financial literacy, I would argue, runs contrary to the standard economic wisdom. It presumes that individuals have the physiological and psychological capabilities, and are in an informational, governance, and social environment, that will allow them to make optimal decisions. If the typical individual is so endowed, financial education can have little impact on improving choices. In effect, one might argue that in the conventional approach individuals either are assumed to be financially literate or that they make choices consistent with financial literacy. Financial literacy can be improved only if individuals persistently make unwise choices that can be corrected by interventions in the decision-making process or in the decision-making environment. But this possibility is assumed away by the conventional wisdom. Research in behavioural economics suggests quite different behavioural and institutional assumptions. There are two key perspectives in behavioural economics that yield distinct implications for financial literacy and financial education (Altman, 2008), both of which deny that individuals typically behave as rationally as assumed by conventional economics. Behavioural economics also questions the conventional assumption that the environment in which financial decisions are make is necessarily ideal (Altman, 2012). This article discusses the implications of the two approaches of behavioural economics for possible improvements to financial literacy and, therefore, to financial decision making. What I refer to as the Kahneman–Tversky approach maintains that individuals often make systematic errors and biases in decision making that are largely rooted in the hard-wiring of the brain. Errors and biases occur when individuals deviate from conventional (neoclassical) decision-making rules. Education can have little effect on such behaviour. This approach is much more supportive of government policy that nudges consumers into making decisions that some might argue are in the best interest of consumers. Experts are assumed to know better than individual decision makers what is in their best interest (Thaler and Sunstein, 2003 and Thaler and Sunstein, 2008; see also Camerer et al., 2003, de Meza et al., 2008, Shefrin, 2002, Thaler, 1980 and Thaler, 2000; see Sugden, 2008 and Sugden, 2009, for a critique of Thaler and Sunstein). What I refer to as the Simon–March approach, argues that individuals are physiologically incapable of behaving as prescribed and predicted by conventional economic wisdom. As a result, they develop heuristics, or experience-based decision-making shortcuts, to make choices that are rational even though often inconsistent with the conventional behavioural norms. It is also recognized that the typical choice environment is characterized by asymmetric information, incomplete information, and even false information and poor education. Both physiological and environmental constraints can, but need not, result in errors in decision making, such as relatively poor investment decisions. Because choice environments can be changed, this approach provides a much stronger rationale for enhancing the quality of financial decision making through improvements to financial education and the decision-making environment. This would include improved access to and improved availability of quality and pertinent information, appropriate decision-making rules and regulations, and appropriate financial education. On the whole, individual preferences, which are regarded as multi-faceted across decision makers, are respected and less attention is paid to nudging unless individual choices can be shown to cause social harm (negative externalities). This perspective is well reflected in the research of Shiller, 2001, Shiller, 2008, Shiller, 2009 and Shiller, 2010, a leading behavioural finance scholar. These different approaches to financial decision-making are summarized in Table 1. I would argue, based on the evidence, that public policy is best constructed on the foundations of the Simon–March approach to behavioural economics. There is much evidence to support the view that financial education positively affects decision making. A person more educated on financial matters, such as concepts of risks, rates of return, credit card payments structures, and household budgeting, makes better decisions, at least from the perspective of the decision maker. Moreover, educating individuals to become more literate in numeracy should reduce errors in decision making. Financial education in this case is not directed towards changing human behaviour, such as overcoming biases as defined by the conventional wisdom. Rather it is directed towards helping individuals who are boundedly rational to make better decisions—decisions informed by more specialized knowledge about financial issues, markets, and products. Following Shiller, one might argue that financial education should be subsidized when it has positive social effects, such as improving savings behaviour and reducing the chances that poor budgeting and investment decisions will be made. But improved decision-making requires much more than just improvements to financial education. Policy interventions directed towards improving the quality and quantity of pertinent information are critically important. This includes introducing quality control measures with regard to this information. The 2008–2009 financial crisis underscores the significance misleading information can have on investment behaviour. Echoing Shiller, agents and organizations marketing financial products, for example, should be obliged to clearly specify the risks and prospective returns involved in purchasing particular financial products. One might even go a step further and require the specification of the composition of financial products in terms of their components’ risks and returns (for example, whether products that on average carry medium risk contain components that are very high risk). This is analogous to the requirements for nutrition and the content requirements for food labels. It should also be made clear whether the consumer bears the risk of the investment—whether government guarantees the value of the initial investment/purchase of the financial product. If individuals believe that government bears the risk, it will be rational for them to engage in riskier behaviour than they would otherwise. One way of partially fixing this problem is to oblige vendors of financial products to inform consumers/clients of the risk inherent in these products and even to require both parties to sign a document specifying that the conditions of risks are understood. Ceteris paribus, improvement to financial education, given poor and/or misleading information, is unlikely to have much positive impact on decision making. The expected positive effects of financial education on decision making is conditional upon the availability and easy (low cost) access to quality information. It is also important to introduce baseline rules to assure that information is framed and presented in a manner easily understood by the consumer. This point is directly related to the importance of quality information. For example, it should be made clear and easily evident what the penalties are for late payments on credit cards, what the longer term rate of interest is, and whether the default for the card is to approve purchases even if they extend the cardholder beyond the contractually agreed credit limit. Another example relates to pension plans. Many behavioural economists recommend making investing in pension plans managed by the private sector, the default option to induce increased savings for retirement. Once investing in pensions becomes the default, employees tend to invest, using the default as a signal that such an investment is a good and safe one. For this reason, those setting the default should be obliged to specify the risks and prospective returns of such investments. Once it is recognized that baseline rules for product information ought to be required, it becomes critical to define the level of financial literacy needed by the representative consumer and decision maker for whom these rules are constructed. Should the government consider the representative consumer to be an individual who is highly literate, or one who is just barely literate? I would argue that the representative consumer should be thought of as at the lower end of the scale since even the least financially literate individuals should be able to understand the financial information before them. It is these people who tend to make the most errors in financial decision-making. Increasing their level of financial literacy would provide these decision makers with the means with which to make the best use of the information at hand. Finally, the Simon–March approach suggests that there is a need for interventions in the marketplace that will re-orient the incentive environment to ensure that individual investors bear the risks of their decisions. This is particularly important for key decision-makers in financial institutions. I do not mean to suggest that people should or can be educated not to value their own material well-being. Rather, investors can be obliged to consider the riskiness of their choices and not allowed to shift their risk onto other unsuspecting people. This would require government to intervene in setting up the structure of compensation packages for decision makers in financial institutions, a move which may be problematic for many policymakers. But given the importance of the financial sector and the possible repercussions of a failure in this sector for the economy at large—namely forced government bailouts (which transfers all risks to the government and thus to the general public)—the sensible alternative may be to impose minimal regulations that minimize the possibility that investors will make choices that are deemed to be too risky. Such policy has been most recently recommended, for example, by Posner (2009) and Roubini and Mihm (2010). As well, moral education is important for financial transactions insofar as there is a need to reduce the probability of fraudulent transactions. A more moral culture with more moral norms embedded in it, incentivize some individuals to engage in an increased level of moral behaviour. One can argue that moral education increases, at a minimum, the psychological costs of engaging in immoral behaviour in financial markets. Behavioural economics also suggests that various types of experiments and surveys can be conducted to determine how consumers would behave under different sets of informational, educational (financial literacy), and institutional settings. One could also determine in this fashion differential behaviour amongst men and women, different ethnic, religious, and immigrant groups, as well as amongst individuals in different income and age cohorts and different occupations. One example of this would be to run experiments on how decision making is affected by the structure of the information provided. Variables should include complexity, location of key information, and font size. Another example would be to see how decision making is affected by altering the moral hazard environment for people at different levels of financial literacy. It would be equally important to clarify the relative role of defaults, information, clarity of information, and incentives in affected financial decision making. One might also examine the extent to which formal financial education instruments improve the quality of financial decision-making when information is misleading, overly complex or hidden, or when defaults are set contrary to the preferences of consumers. Overall, behavioural economics open the door to the improvement in decision making through financial education. They also lend support to the possibility that other public policy initiatives can enhance financial literacy and thereby improve the quality of financial decision-making. The bounded rationality approach pays particular attention to how smart but non-neoclassical decision-makers are influenced by information and the incentive environment. Formal financial education courses and seminars are not as important here as are quantity, quality, and structure of information and its availability at low cost, as well as institutional parameters that affect financial decision-making. More formal education instruments are important with regard to enhancing the capacity of individuals to process and understand the information at hand. It is these factors combined, and not simply formal financial education, that can be expected have the most profound impact on financial literacy.