Why Financial Literacy Programs Fail

first_img Post navigation Nobody is born knowing how to manage money.From simple tasks like making a household budget or balancing a checkbook, to evaluating life insurance and selecting an investment vehicle to fund a comfortable retirement, people have to learn about personal finance in order to be successful overseers of their incomes and assets.But mere knowledge of financial matters isn’t enough. Nor is simply having greater raw intelligence.As a recent study by researchers from Harvard Business School, the Federal Reserve and Wellesley College noted, having more financial literacy and cognitive capability does produce better financial decisions, from savings to picking stocks.“Yet, there is little evidence that education intended to improve financial decision-making is successful,” the researchers wrote.This doesn’t necessarily mean that understanding finance doesn’t make you a better personal financial manager.Indeed, another recent study, this one of households in the United Kingdom, found that people with lower financial literacy were more likely to take out payday loans and have other high-interest consumer loans than those with more financial literacy.Low-literacy individuals didn’t show as much understanding of credit terms. “They are also less likely to engage in behavior which might help them to improve their awareness of the credit market,” the researchers wrote in the February 2013 issue of the Journal of Banking and Finance.Why Financial Literacy Education FailsSo the question is not whether knowing about finance doesn’t help, but whether teaching people about finance helps.This question is highly relevant in the wake of the recent financial crisis, as noted in a paper Canadian researchers published in a recent edition of the Journal of Education Policy, because governments have increasingly embraced financial literacy education as a potential way to avoid future debacles.Unfortunately, according to these researchers, the popularity of state-mandated personal financial education is based more on politics than evidence.Why doesn’t financial literacy education necessarily make us better personal financial managers?One reason is that people’s emotional and psychological relationship with money is as powerful or more powerful than their intellectual grasp of how to manage it wisely.The study of this relationship is called behavioral finance. It tries to explain why, even when we know better, we make bad financial decisions.So, What Does Work?Of course, while knowing why we make bad decisions is interesting, it would be a lot more interesting to learn what, besides formal personal financial education, could help us be smarter about money.Recent research from South Africa suggests one possibility: Rather than making us sit in classrooms listening to lectures about the effects of compound interest, embed financial messages in soap operas.The South African researchers examined behavior of people after watching two different television shows about leading characters who gamble, buy items on installment plans and wind up deeply in debt.One show featured messages about financial literacy while the other did not. Watchers of shows without messages were more likely to make bad financial decisions.A less-entertaining conclusion was reached by the Harvard, Wellesley and Federal Reserve researchers.Looking at evidence of effects of personal finance and mathematics courses some states require for high school graduation, these researchers found that, while finance courses did not lead people to make better financial decisions, math courses did.Former math students, they found, declared bankruptcy less often and had fewer foreclosures.This subject is likely to generate much more study, given the concern about consumers’ role in avoiding future financial debacles. But for now the conclusion seems to be that we should do our math homework, and then relax in front of the TV to watch a show about a good money manager.Mark Henricks reports on finance, business, technology and other topics from Austin, Texas. He is the author of Not Just A Living: The Complete Guide to Creating a Business that Gives You A Life and other books. Visit him online or on Twitter @markhenricks. Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window) Relatedlast_img read more

Amazon believes an exemption is in the publics be

first_imgAmazon believes an exemption is in the public’s best interest because it progresses Congress’ goal to launch commercial small unmanned aircraft systems (sUAS) in the US faster. –Christina MulliganAmazon announces new mobile web development tools for AWS at NYC SummitAmazon debuted an updated mobile SDK and new Cognito, Zocalo and Mobile Analytics services at the 2014 Amazon Web Services Summit in New York City.The company detailed the new and updated developer products and services in a blog post explaining how these mobile development offerings will make it easier to build AWS-powered mobile apps. In the updated AWS Mobile SDK, new features include a DynamoDB object mapper for iOS, an S3 transfer manager and support enhancements for Android, Amazon’s FireOS and iOS/Objective-C.The Amazon Cognito service is focused on data synchronization and user identity for developers to manage data synchronization across devices. Amazon Zocalo is a secure enterprise storage and sharing service that can be managed from any device, and Amazon Mobile Analytics uses raw app data to calculate and report various metrics to developers.For more information, check out the AWS blog post. –Rob Marvin Kids programming robots to learn new skillsWith just a smart tablet and Angry Birds, Georgia Institute of Technology researchers are making it possible for kids to program robots. The researchers have paired an Android tablet paired with a small humanoid robot, and kids are teaching it how to play Angry Birds just by dragging their finger on the tablet and flinging the birds across the screen. While the kids are playing Angry Birds, the robot is watching and recording what’s happening in it’s memory, and then mimics what the child did when it is their turn to play.“The robot is able to learn by watching because it knows how interaction with a tablet app is supposed to work,” said Ayanna Howard, professor of electrical and computer engineering at Georgia Tech. –Christina MulliganAmazon wants the FAA to allow them to test their delivery dronesAmazon is petitioning the Federal Aviation Administration (FAA) for permission to test their drones, Amazon Prime Air, in the United States. Currently, Amazon is limited to conducting R&D flights indoors or outside the country because it is a commercial enterprise.“Amazon would prefer to keep the focus, jobs, and investments of this important research and development initiative in the United States by conducting private research and development operations outdoors near Seattle,” Paul Misener, VP of global public policy at Amazon, wrote in a letter to FAA.last_img read more

Kaldi an opensource speech recognition toolkit

first_imgKaldi, an open-source speech recognition toolkit, has been updated with integration with the open-source TensorFlow deep learning library.Developers Yishay Carmiel and Hainan Xu of Seattle-based IntelligentWire are behind the integration, and their plan is to use the combination to accelerate the advancement of automatic speech recognition (ASR) systems.IntelligentWire specializes in cloud software that helps businesses gather analytics from live phone conversations between representatives and customers and automatically handles data entry and responding to requests. The corporation currently focuses on the contact center market, which amasses over 50 billion hours in phone calls and 25 billion hours in business application use across 22 million agents worldwide each year, according to the post.“For an ASR system to be useful in this context, it must not only deliver an accurate transcription but do so with very low latency in a way that can be scaled to support many thousands of concurrent conversations efficiently,” Carmiel wrote in a post on the Google Developers Blog along with Staff Research Engineer at Google, Raziel Alvarez. “For IntelligentWire, the integration of TensorFlow into Kaldi has reduced the ASR development cycle by an order of magnitude,” the post reads. “If a language model already exists in TensorFlow, then going from model to proof of concept can take days rather than weeks; for new models, the development time can be reduced from months to weeks.”What exactly IS TensorFlow?The primary issues they need to overcome in ASR are all things the developers think will be much more quickly handled with deep learning models: algorithms that are adaptable and expandable, knowing what data is valuable in the context of multiple languages and acoustic environments, and the pure computational power required to parse raw audio into something usable.Carmiel and Xu hope that by bringing together two “vibrant” and active open-source user-bases, speech-based products and research will see an abundance of breakthroughs.last_img read more