Limited and Varying Consumer Attention: Evidence from Shocks to the Salience of Bank Overdraft Fees / Victor Stango, Jonathan Zinman.

Format:

Book

Author/Creator:

Stango, Victor.

Contributor:

National Bureau of Economic Research.

Zinman, Jonathan.

Series:

Working Paper Series (National Bureau of Economic Research) no. w17028.

NBER working paper series no. w17028

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Limited and Varying Consumer Attention

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2011.

Summary:

We explore dynamics of limited attention in the $35 billion market for checking overdrafts, using survey content as shocks to the salience of overdraft fees. Conditional on selection into surveys, individuals who face overdraft-related questions are less likely to incur a fee in the survey month. Taking multiple overdraft surveys builds a "stock" of attention that reduces overdrafts for up to two years. The effects are significant among consumers with lower education and financial literacy. Individuals avoid overdrafts by making fewer low-balance debit transactions and cancelling automatic recurring withdrawals. The results raise new questions about consumer financial protection policy.

Notes:

Print version record

May 2011.