The Disparate Effect of Nudges on Minority Groups

Maya Haran Rosen; Orly Sade

doi:10.1093/rcfs/cfac011

The Disparate Effect of Nudges on Minority Groups

Maya Haran Rosen^*
, Orly Sade

^*Corresponding author for this work

BA Business Department

Research output: Contribution to journal › Article › peer-review

5 Scopus citations

Abstract

We compare the effect of a text message sent to mobile phones on the actions of minority groups versus the general population in Israel. Using proprietary data from a dedicated survey, we show that the text message had an overall positive effect, but a significantly smaller effect on minority groups. We provide insights into potential channels (low digital literacy, low financial literacy, and low trust) that contribute to the differential effect. This evidence suggests that policy interventions relying on voluntary take-up by participants may be disproportionately taken up by nonmarginalized groups, an unintended effect that can exacerbate rather than mitigate disparities. (JEL D14, G38, G41, G51, G53, I38).

Original language	English
Pages (from-to)	605-643
Number of pages	39
Journal	Review of Corporate Finance Studies
Volume	11
Issue number	3
DOIs	https://doi.org/10.1093/rcfs/cfac011
State	Published - 1 Aug 2022

Bibliographical note

Publisher Copyright:
© 2022 The Author(s). Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved.

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SDG 8 Decent Work and Economic Growth

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10.1093/rcfs/cfac011

Cite this

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abstract = "We compare the effect of a text message sent to mobile phones on the actions of minority groups versus the general population in Israel. Using proprietary data from a dedicated survey, we show that the text message had an overall positive effect, but a significantly smaller effect on minority groups. We provide insights into potential channels (low digital literacy, low financial literacy, and low trust) that contribute to the differential effect. This evidence suggests that policy interventions relying on voluntary take-up by participants may be disproportionately taken up by nonmarginalized groups, an unintended effect that can exacerbate rather than mitigate disparities. (JEL D14, G38, G41, G51, G53, I38).",

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AB - We compare the effect of a text message sent to mobile phones on the actions of minority groups versus the general population in Israel. Using proprietary data from a dedicated survey, we show that the text message had an overall positive effect, but a significantly smaller effect on minority groups. We provide insights into potential channels (low digital literacy, low financial literacy, and low trust) that contribute to the differential effect. This evidence suggests that policy interventions relying on voluntary take-up by participants may be disproportionately taken up by nonmarginalized groups, an unintended effect that can exacerbate rather than mitigate disparities. (JEL D14, G38, G41, G51, G53, I38).

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The Disparate Effect of Nudges on Minority Groups

Abstract

Bibliographical note

UN SDGs

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