Absence of conflict of interest.
Citation
Highlights
- The study's objective was to examine the effect of situational stimuli in a financial education intervention on investment knowledge.
- The study design was a randomized controlled trial that assigned college students to one of three treatment groups (information handout, information handout plus scenario depicting market volatility, and information handout plus scenario depicting a peer effect) or the control group. Using data from pre- and post-tests, the authors compared differences in outcomes between the treatment and control groups.
- The study found that participation in the investment education intervention was significantly related to increases in post-test knowledge when compared to the control group.
- This study receives a low evidence rating. This means we are not confident that the estimated effects are attributable to the financial education intervention; other factors are likely to have contributed.
Features of the Study
The study used a randomized controlled trial to examine the impact of an investment education intervention on investment knowledge. The goal of the investment education intervention was to gauge participants reactions to varying information and situational stimuli and track changes in their investment knowledge. Study participants were 172 undergraduate students, ages 18 and older, at a large land grant university in the U.S. The authors randomly assigned the participants to one of three treatment groups or the control group. Treatment group 1 received a handout with investment information (e.g., stocks, bonds, interest rates). Treatment group 2 received the same handout as group 1 but also received a scenario that emphasized the unpredictableness of the market (market volatility). Treatment group 3 received the same handout investment information but also received a scenario which entailed recent significant financial loss due to investment failure (peer effect). The control group received a handout that did not contain investment information.
The intervention was delivered within an hour and all materials were given to participants in hard copies. After completing the investment knowledge pre-test, the study participants were exposed to the assigned study condition and completed the post-test which contained the same questions as the pre-test but in a different order. The study authors used ten questions from the Financial Industry Regulatory Authority (FINRA) Investor Knowledge Quiz to create the pre- and post-tests. The authors compared the differences in test scores between the treatment and control groups using statistical tests. The analysis sample included 30 participants in treatment group 1, 56 participants in treatment group 2, 50 participants in treatment group 3, and 26 participants in the control group.
Findings
Knowledge and skills for financial decision making
- The study found a significant relationship between participation in the investment intervention and increases in post-test scores, where post-test scores for treatment group 1, treatment group 2, and treatment group 3 were significantly higher than scores for the control group.
- However, the study did not find significant differences in post-test scores between the three treatment groups.
Considerations for Interpreting the Findings
The original sample size at random assignment was 172 participants. The authors noted that they excluded incomplete responses from the analysis, resulting in an analytic sample of 162 participants. However, the authors do not state which groups lost participants. This constitutes unknown attrition, and the study is not eligible for a high causal evidence rating. Additionally, the authors did not account for preexisting differences between the groups before program participation or include sufficient control variables in their analyses. These preexisting differences between the groups—and not the intervention—could explain the observed differences in outcomes.
Causal Evidence Rating
The quality of causal evidence presented in this report is low because the study had unknown attrition and the authors did not ensure that the groups being compared were similar before the intervention. This means we are not confident that the estimated effects are attributable to the financial education intervention; other factors are likely to have contributed.