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Credit counseling: a substitute for consumer financial literacy?
journal contribution
posted on 2023-06-08, 22:27 authored by Richard Disney, John Gathergood, Jörg WeberIs financial literacy a substitute or complement for financial advice? We analyze the decision by consumers to seek financial advice in the form of credit counseling. Credit counseling is an important component of the consumer credit sector for consumers facing debt problems. Our analysis accounts for the endogeneity of an individual’s financial situation to financial literacy, and the endogeneity of financial literacy to exposure to credit counseling. Results show counseling substitutes for financial literacy. Individuals with better literacy are 60% less likely to use credit counseling. These results suggest that credit counseling provides a safety net for poor financial literacy.
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Publication status
- Published
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- Published version
Journal
Journal of Pension Economics and FinanceISSN
1474-7472Publisher
Cambridge University PressExternal DOI
Issue
4Volume
14Page range
466-491Department affiliated with
- Economics Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2015-09-10First Open Access (FOA) Date
2016-02-03First Compliant Deposit (FCD) Date
2016-02-03Usage metrics
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