Take-Up of Financial Education: Demographic Characteristics and Prior Knowledge

To improve consumers’ financial decisions, many policy makers support financial education programs. However, some eligible consumers do not participate, limiting program effectiveness. The authors examine a home-buying and mortgage education website offered to more than 6,000 prospective home buyers, documenting differences in take-up (i.e., who decides to participate) and duration of use by consumers’ demographic characteristics, objective knowledge, and subjective knowledge. These analyses rely on a unique data match between surveys measuring consumers’ characteristics and clickstream data tracking website use. The results show that older participants and first-time home buyers are more likely to take up the website, but otherwise there is little relationship between observable demographics and take-up. Consistent with enrichment theory, consumers who are more objectively knowledgeable have higher take-up. However, consistent with “feeling of knowing” research, a one-standard-deviation increase in subjective knowledge is associated with approximately a ten-percentage-point decrease in take-up (controlling for other factors). Subjectively knowledgeable consumers also use educational materials for a shorter duration. The findings add to literature on consumer information search and inform policy makers about consumers’ use of online financial education.