Improving the level of financial literacy and the influence of the cognitive ability in this process

There is no consensus in the literature on the effect of personal finance courses on individuals' financial literacy level. This research analyzes the influence of a personal finance course of 72 class hours per semester on the financial literacy level of Brazilian undergraduate students and also analyzes the influence of the cognitive ability on this learning process. We performed a quasi-experiment and we used an approach of difference in differences in which we compared the results obtained by the same students in two distinct groups (students who participated in the course and students who did not participate). From the results, treatment group participants significantly increased the level of financial literacy, considering the three dimensions assessed: financial knowledge, attitude, and behavior. However, the individuals with higher cognitive ability did not present higher levels of learning when compared to the others. Additionally, in order to visualize in practice the influence of financial literacy, we tested whether the personal finance course was also able to reduce the bias of a behavior called disposition effect. The results indicated that the course worked as a debiasing strategy for this bias.