Members in the Media
From: PBS

Poverty makes financial decisions harder. Behavioral economics can help


Last month, behavioral economist Dan Ariely and his team at the Center for Advanced Hindsight opened up the Common Cents Lab. Its goal is twofold: to examine how those living in poverty misspend their money and to help the poor make better financial decisions.

Kristen Doerer: What’s new about this initiative?

Dan Ariely: The important new initiative is that we’re going to go into financial institutions for the poor — the Latino community banks, the self-help bank, the federal credit unions, all types of financial institutions that serve lower, middle-income Americans — and we’re going to try to figure out what we can do to help them out. So we will bring a behavioral economics, social science perspective and examine their procedures. For example, let’s see where people should be taking cheaper loans, but don’t; where people should be borrowing less, but don’t; where people should put a little bit of money to the side, but don’t.

Read the whole story: PBS

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