We report the results of a longitudinal intervention with students across five universities in China designed to reduce online consumer debt. We allocate participants to either a financial literacy treatment group, a self-control treatment group, or a zero-touch control group. Our self-control training intervention features detailed tracking of spending and borrowing, budgeting, and introspection about consumption choices. This intervention reduces 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 improve borrowing behavior on e-commerce platforms.
|Journal||Journal of Financial and Quantitative Analysis|
|Publication status||Accepted/In press - Jan 2021|
- Online borrowing
- Consumer credit
- Financial literacy