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Lookup NU author(s): Professor Darren DuxburyORCiD
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This report evaluates the evidence regarding financial rules of thumb, developing a robust collection methodology in order to consider what personal finance heuristics exist and are used in the wider economy.Chapter 1 presents an introduction to rules of thumb, including the factors which necessitate their existence. Complexity and how we perceive time are discussed as providing a decision-making environment amenable to the use of rules of thumb. In order to develop and assess rules of thumb, this understanding is crucial.Chapter 2 evaluates common financial rules of thumb against the key success factors of satisficing, framing, default options, simplicity, uncertainty and transparency. This chapter also provides a typology of financial rules of thumb, the components of which are assessed as a counter to their driving bias. This provides insight into the design process.Chapter 3 discusses evidence relating to the design, communication and application of rules of thumb for personal finance and their implications for designing new financial rules of thumb.
Author(s): Whittle R, Duxbury D, Werner K, Simister J
Publication type: Report
Publication status: Published
Online publication date: 01/09/2017
Acceptance date: 01/09/2017
Institution: Money Advice Service