Limited and Varying Consumer Attention: Evidence from Shocks to the Salience of Bank Overdraft Fees
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.
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Copy CitationVictor Stango and Jonathan Zinman, "Limited and Varying Consumer Attention: Evidence from Shocks to the Salience of Bank Overdraft Fees," NBER Working Paper 17028 (2011), https://doi.org/10.3386/w17028.Download Citation
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Published Versions
Victor Stango & Jonathan Zinman, 2014. "Limited and Varying Consumer Attention: Evidence from Shocks to the Salience of Bank Overdraft Fees," Review of Financial Studies, vol 27(4), pages 990-1030. citation courtesy of 
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