Publications
Publications
- December 2011
- Journal of Finance
Prices or Knowledge? What Drives Demand for Financial Services in Emerging Markets?
By: Shawn A. Cole, Thomas Sampson and Bilal Zia
Abstract
Financial development is critical for growth, but its micro-determinants are not well understood. We test leading theories of low demand for financial services in emerging markets, combining novel survey evidence from Indonesia and India with a field experiment. We find a strong correlation between financial literacy and behavior. However, a financial education program has modest effects, increasing demand for bank accounts only for those with low levels of education or financial literacy. In contrast, small subsidies greatly increase demand. A follow-up survey confirms these findings, demonstrating that the newly opened accounts remain open and in use two years after the intervention.
Keywords
Price; Knowledge; Demand and Consumers; Emerging Markets; Banks and Banking; Education; Finance; Behavior; Service Operations; Financial Services Industry; India; Indonesia
Citation
Cole, Shawn A., Thomas Sampson, and Bilal Zia. "Prices or Knowledge? What Drives Demand for Financial Services in Emerging Markets?" Journal of Finance 66, no. 6 (December 2011): 1933–1967.
About The Author
