Limited and Varying Consumer Attention: Evidence from Shocks to the Salience of Bank Overdraft Fees

A-Tier
Journal: The Review of Financial Studies
Year: 2014
Volume: 27
Issue: 4
Pages: 990-1030

Authors (2)

Victor Stango (not in RePEc) Jonathan Zinman (Dartmouth College)

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

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.

Technical Details

RePEc Handle
repec:oup:rfinst:v:27:y:2014:i:4:p:990-1030.
Journal Field
Finance
Author Count
2
Added to Database
2026-01-29