Agarwal, SumitDriscoll, John C.Gabaix, XavierLaibson, David2023-05-232023-05-232007-06-012019-12-16https://repository.upenn.edu/handle/20.500.14332/43942The sophistication of financial decisions varies with age: middle-aged adults borrow at lower interest rates and pay fewer fees compared to both younger and older adults. We document this pattern in ten financial markets. The measured effects cannot be explained by observed risk characteristics. The sophistication of financial choices peaks around age 53 in our cross-sectional data. Our results are consistent with the hypothesis that financial sophistication rises and then falls with age, although the patterns that we observe represent a mix of age effects and cohort effects.The views expressed in this paper are those of the authors and do not represent the policies or positions of the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of Chicago. Opinions and errors are solely those of the author and not of the institutions with whom the author is affiliated. © 2007 Pension Research Council. All rights reserved.D1, D4, D8, G2, J14Household financebehavioral financebehavioral industrial organizationagingshroudingauto loanscredit cardsfeeshome equitymortgagesEconomicsWorking Paper