Cultivating Self-Control in FinTech: Evidence from a Field Experiment on Online Consumer Borrowing

83 Pages Posted: 24 Oct 2019 Last revised: 22 Jan 2021

See all articles by Di Bu

Di Bu

Macquarie University, Department of Applied Finance

Tobin Hanspal

WU Vienna University of Economics and Business; Vienna Graduate School of Finance (VGSF)

Yin Liao

Macquarie University - Department of Applied Finance and Actuarial Studies; Australian National University - The Centre for Applied Macroeconomic Analysis (CAMA)

Yong Liu

Wuhan University of Science and Technology

Date Written: December 2020

Abstract

We report the results of a longitudinal intervention with students across five universities in China designed to reduce online consumer debt. Our research design allocates individuals to either a financial literacy treatment, a self-control training program, or a zero-touch control group. The self-control training program features detailed tracking of spending and borrowing, budgeting, and introspection about consumption choices. These sessions reduce future online borrowing and delinquency charges, mainly driven by a reduction in entertainment-related spending and borrowing. In contrast, financial literacy interventions improve test scores but only marginally affect borrowing. Our results suggest that cultivating self-regulation and budgeting skills can largely improve borrowing behavior on e-commerce platforms.

Keywords: Self-control, Online borrowing, Consumer credit, FinTech, Financial literacy

JEL Classification: G51, G53, D14, D18, G23, G21

Suggested Citation

Bu, Di and Hanspal, Tobin and Liao, Yin and Liu, Yong, Cultivating Self-Control in FinTech: Evidence from a Field Experiment on Online Consumer Borrowing (December 2020). SAFE Working Paper No. 273, Available at SSRN: https://ssrn.com/abstract=3469571 or http://dx.doi.org/10.2139/ssrn.3469571

Di Bu

Macquarie University, Department of Applied Finance ( email )

North Ryde
Sydney, New South Wales 2109
Australia

Tobin Hanspal (Contact Author)

WU Vienna University of Economics and Business ( email )

Welthandelsplatz 1 1
Wien, 1020
Austria

Vienna Graduate School of Finance (VGSF) ( email )

Welthandelsplatz 1
Vienna, 1020
Austria

Yin Liao

Macquarie University - Department of Applied Finance and Actuarial Studies ( email )

Eastern Rd.
North Ryde
Sydney, NSW 2109
United States

Australian National University - The Centre for Applied Macroeconomic Analysis (CAMA) ( email )

Canberra, Australian Capital Territory 2601
Australia

Yong Liu

Wuhan University of Science and Technology ( email )

947 Heping Avenue,Qingshan District
null
Wuhan, Hubei 430081
China

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
531
Abstract Views
2,967
Rank
96,650
PlumX Metrics