From a policy perspective, it is crucial to identify whether the reason people behave as they do is primarily the result of lack of knowledge and mastery of relevant financial management techniques, or whether it reflects fundamental aspects of human nature. Only in the former case is conventional financial education an appropriate remedy. Such education might include topics such as the benefits of diversification, the nature of compound interest, the implications of tax incentives, pension planning, the management of credit cards and so forth. At all events, if it is established that the basic problem is insufficient knowledge, the question is.
