Brazil- Understanding & Improving Household Investment Behavior


  • PROJECT TITLE: From Shop to Stock: Understanding and Improving Household Investment Behavior
  • TARGET SEGMENT: Individual investors
  • DELIVERY CHANNEL: Online stock market simulator
  • EVALUATION TEAM: Arianna Legovini (World Bank),Vincenzo Di Maro (World Bank), Martin Kanz (World Bank), Deniz Anginer (World Bank), Astrid Zwager (World Bank)
  • PARTNERS: BM&FBOVESPA Brazilian Stock Exchange
  • TIMELINE: January 2012 - December 2014


The study offers a unique opportunity to study the individual and interaction effects of financial literacy campaigns together with multiple other interventions to better understand household investment behavior. While being applied in the Brazilian stock market, the lessons learned will help illuminate household financial decision making in general and offer suggestions on how to effectively use financial literacy campaigns to support consumer protection and promote a new generation of people accessing financial instruments in emerging markets

Understanding why people make the investment choices they do and what influence financial literacy can have in this decision process can help identify interventions that can both improve consumer protection and support the development of capital markets by improving efficiency through better investment decisions at the individual level.

Drawing from the current literature on behavioral finance, this study will work with the Brazilian stock market (BM&FBOVESPA) to test a range of interventions to better understand why people make the decisions they do and identify how to reduce common investor biases observed in the stock market through targeted financial education.

BM&FBOVESPA has developed an online stock market simulator that will be used as an environment to test barriers to entry for stock market participation while the “home broker” software provided by stock brokers in Brazil (which closely resemble the online simulator, offering investors the opportunity to invest online) will be used to selectively provide interventions to stock market participants to reduce investor biases.

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