Visual Tools and Narratives
New Ways to Improve Financial Literacy
Published in: Journal of Pension Economics and Finance, Volume 16, Issue 3 (July 2017), pages 297-323. doi: 10.1017/S1474747215000323
Posted on RAND.org on October 06, 2017
We developed and experimentally evaluated four novel educational programs delivered online: an informational brochure, a visual interactive tool, a written narrative, and a video narrative. The programs were designed to inform people about risk diversification, an essential concept for financial decision-making. The effectiveness of these programs was evaluated using the American Life Panel. Participants were exposed to one of the programs, and then asked to answer questions measuring financial literacy — in particular, risk literacy — and self-efficacy. All of the programs were found to be effective at increasing self-efficacy, and several improved financial literacy, providing new evidence for the value of programs designed to improve financial decision-making.