Assessing Financial Education Methods: Principles vs. Rules-of-Thumb Approaches

37 Pages Posted: 8 Jan 2020

See all articles by Bill Skimmyhorn

Bill Skimmyhorn

Mason School of Business, College of William & Mary; U.S. Army Office of Economic and Manpower Analysis

Evan Davies

U.S. Army

David Mun

U.S. Army

Brian Mithchell

U.S. Army

Date Written: December 17, 2019

Abstract

Despite thousands of programs and tremendous public and private interest in improving financial decision-making, little is known about how best to teach financial education. Using an experimental approach, the authors estimated the effects of two different education methodologies (principles-based and rules-of-thumb) on the knowledge, self-assessed knowledge, financial self-efficacy, motivation to learn, willingness to seek advice, risk preferences, and time preferences of high-performing undergraduate students. They found both methods increased cognitive measures of knowledge and non cognitive measures of self-efficacy, motivation to learn, and willingness to take financial risks. They found few differences in the relative effectiveness of each method, although the principles methodology appears to generate larger gains in self efficacy, while the rules-of-thumb method appears to reduce individuals’ willingness to seek advice.

Keywords: financial education, financial learning assessment, financial literacy, heuristics, teaching methodologies

JEL Classification: A22, D14, H52, J24

Suggested Citation

Skimmyhorn, William and Davies, Evan and Mun, David and Mitchell, Brian, Assessing Financial Education Methods: Principles vs. Rules-of-Thumb Approaches (December 17, 2019). Available at SSRN: https://ssrn.com/abstract=3505521 or http://dx.doi.org/10.2139/ssrn.3505521

William Skimmyhorn (Contact Author)

Mason School of Business, College of William & Mary ( email )

Williamsburg, VA
United States

HOME PAGE: http://https://mason.wm.edu/faculty/directory/full-time-faculty/skimmyhorn_w.php

U.S. Army Office of Economic and Manpower Analysis ( email )

West Point, NY
United States

Evan Davies

U.S. Army ( email )

United States

David Mun

U.S. Army ( email )

United States

Brian Mitchell

U.S. Army ( email )

United States

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