009 – Education and Financial Mistakes: The Case of Avoidable Trading Fees in Stock Markets

Paulo Pereira da Silva & Victor Mendes
Portuguese Economic Journal

We study a quasi-natural experiment that altered the structure of commission fee schedules applied to retail investors in the Portuguese stock market in 2003.Using a difference-in-differences analysis, we show that investors with a university degree, financial knowledge and numerical skills demonstrate greater ability and eagerness in adjusting their trading patterns to the new commission schedules. The impact of education was stronger for those lacking trading experience. Investors with a university degree that were more prone to issue small orders before the event were also more eager to scale up their order size.

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