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Credit counseling: a substitute for consumer financial literacy?


Richard Disney



Is financial literacy a substitute or complement for financial advice? We analyze the decision by consumers to seek financial advice in the form of credit counseling. Credit counseling is an important component of the consumer credit sector for consumers facing debt problems. Our analysis accounts for the endogeneity of an individual's financial situation to financial literacy, and the endogeneity of financial literacy to exposure to credit counseling. Results show counseling substitutes for financial literacy. Individuals with better literacy are 60% less likely to use credit counseling. These results suggest that credit counseling provides a safety net for poor financial literacy.


Disney, R., Gathergood, J., & Weber, J. (2015). Credit counseling: a substitute for consumer financial literacy?. Journal of Pension Economics and Finance, 14(4),

Journal Article Type Article
Publication Date Oct 1, 2015
Deposit Date Jan 26, 2016
Publicly Available Date Jan 26, 2016
Journal Journal of Pension Economics and Finance
Print ISSN 1474-7472
Electronic ISSN 1475-3022
Publisher Cambridge University Press
Peer Reviewed Peer Reviewed
Volume 14
Issue 4
Keywords Credit counseling; financial advice; financial literacy; household finance
Public URL
Publisher URL


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