Overdraft surveys reduce balances in the red: Philly Fed paper
A Philadelphia Federal Reserve paper published on Wednesday shows that individuals who are surveyed about overdraft-related issues are less likely to incur overdraft fees.
Victor Stango and Jonathan Zinman, the paper's authors, use survey content on overdraft questionnaires to explore the dynamics of individuals' attention to checking overdrafts and overdraft fees.
Stango and Zinman find that consumer take-up of overdrafts drops sharply after taking surveys that mention overdrafts or topics that consumers might associate with overdrafts, spending control, balance monitoring, or other bank fees. Meanwhile, the paper shows unrelated survey content does not affect overdrafts. The results suggest that limited consumer attention plays an important role in explaining overdrafts.
Click here to read the paper.
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