Household Finance
Session Chair: Shuang Chen, University of Melbourne
Fighting Climate Change with FinTech
Antonio Gargano; University of Houston
Alberto Rossi; Georgetown University
We study the environmental sustainability of individuals’ consumption choices using unique data from a FinTech App that tracks users’ spending and emissions at the transaction level. Using a randomized encouragement design, we show that individuals are likely to purchase carbon calculator services that provide them with detailed transaction-level information about their emissions. However, such a tool does not cause significant changes in their consumption and emissions. On
the other hand, services that offset individuals’ emissions by planting trees are less likely to be adopted but prove effective in reducing users’ net emissions. Conditioning on age, gender, and income does not alter our findings. Our results show the challenges and opportunities associated with the automated tools promoting sustainable behavior that were initially confined to specialized
FinTech Apps and are now becoming widespread across large financial institutions.
Discussant: Roger Loh, Singapore Management University
Banking on Education: How Credit Access Promotes Human Capital Development
Suzanne Chang; Tulane University
Saravana Ravindran; National University of Singapore
This paper presents new evidence on the impact of bank branch expansion and credit access on
human capital outcomes for children. Using a regression discontinuity design, we study a branch
authorization policy by the Reserve Bank of India that encouraged banks to open branches in underbanked districts, where the population-to-branch ratio exceeded the national average. Bank presence, bank lending, and household borrowing increased. We find significant improvements in test scores: children in underbanked districts scored 0.16–0.22 SD higher on reading and math. We document three mechanisms. First, we find evidence for a demand-side channel where parents spent more on their children’s education and children spent more time on homework. Second, we document supply-side impacts in improvements in the quantity and quality of schools and teachers. Third, we find support for a labor market channel, with shifts away from agricultural employment and towards employment in manufacturing, while self-employed individuals expanded their businesses.
Discussant: Kristle Romero Cortez, University of New South Wales