Ethnography in consumer finance

Ethnography has a long history of use in consumer finance research. Since the late 19th century, anthropologists have used ethnography to discover how people create, share, and manage money.

Researchers have investigated topics as broad as the creation of shell money as currency in Melanesia, community-based savings associations in Africa and the Caribbean, and use of tally sticks to record debt in many parts of the world.

As more consumers around the world adopt formal financial products and services, ethnography is being used to investigate an increasingly wide range of behaviours and products, including household financial management, payday loans, mortgages, microfinance, mobile money, Islamic banking, and remittances.

Ethnography as a method is also changing. New data sources and analytical software are being applied to both classic anthropological problems (such as kinship) and new topics (such as mobile money).

Technological developments have resulted in an entirely new field known as computational anthropology. Ethnography is also a core method in human-centred design, an approach to research that incorporates interactions with people into the design of a product or service.

What is Ethnography

  • Qualitative
  • Combines multiple methods
  • Face-to-face or remote data collection

Ethnography is a method of studying people in the places where they live or where the action is taking place. It is a versatile method that can be coupled with both qualitative and quantitative techniques, and it can be used in virtually any setting.

Ethnography involves collecting data using a variety of tools, including recording audio or video, writing fieldnotes, collecting documents, or deploying questionnaires and surveys.

Probably the most important method is participant observation, which involves learning about research participants' experiences by doing activities with them.

Technically, ethnography is more of an approach than a method because ethnographers often use multiple ways to collect data. However, all ethnographic studies have two features in common:

  1. Research is carried out within real-life settings. This could be a village, neighbourhood, workplace, or online, such as an Internet forum.
  2. Researchers use observational techniques alongside other methods to record actual behaviours as well as reported ones.

Ethnographers' emphasis on living with people and observing their behaviour in real-life contexts distinguishes it from other qualitative methods, which tend to rely on either self-reporting or analysis of third-party data (for an exception, see Experiments in consumer finance).

In consumer finance, ethnography is particularly useful for understanding how consumers adapt to changing products or economic conditions, and for how people's financial management is interconnected with their social relations.


Research occurs in context

The places in which people live and work—home, office, school, social media, etc.—significantly affect their actions and choices. While financial products are often targeted at individuals and households, people's choices are in fact influenced by their family, friends, peers, and finance professionals. Advertising, availability of technology, and financial regulation are also among the contextual factors that impact financial behaviours. Ethnographers carry out research within these contexts, collecting data on how people interact with their social and physical environments.

Participation as a way of learning

A good way to learn about people's experiences is to join them in their activities. Participant observation is used by ethnographers to gain an insider's view into how people act, think, and feel.

For example, standing in a bank line with a customer can be a powerful method to understand their frustration at having to wait and what can be done to make transactions more efficient. Using a product or program, such as online banking, helps show up design flaws that research participants might not think to mention when asked for feedback.

Participant observation is particularly useful when trying to explain what motivates people to make choices that may not seem rational (such as using an expensive payday lender) or to understand the technical issues they struggle with (such as problems using online banking).

Cross-check data sources

Ethnographers collect observational data as well as verbal and written data, and they can cross-check these sources to identify instances in which what people say they do differs from what people actually do. This is useful for (at least) two reasons:

  1. It helps identify errors and omissions in data. These may have been introduced into data either because people do not tell the truth, do not accurately recall information, omit information that they feel is unimportant, or because there is a cultural taboo on discussing it. Sometimes people struggle to find the words to explain their physical behaviours (such as why they keep documents in certain places) (see Case Study 2 below).
  2. Research participants' behaviour may contradict what they are saying, but this does not mean that the verbal data is simply incorrect and should be discarded. In all human societies, there is a difference between what people feel they should do (ideal norms) and what they actually do (actual norms). Differences in observed and verbal data may not be due to error or omission, but rather to this variation. In fact, ethnographers pay special attention to this gap because it helps identify cultural patterns in how people think, talk, and behave.

Track behaviour over time

Because ethnographers generally spend considerable time in the field (ranging from days to years), they are able to record data on repeated behaviour, such as seasonal harvests, rituals, and work patterns. This can be particularly useful in consumer finance research because people's interactions with money and financial products are often cyclical:

  • Most people get paid at specific times and pay bills at regular intervals
  • Spending patterns cycle throughout the year due to changing seasons or religious festivals (e.g., many people spend more money at Christmas time)
  • Yearly bonuses or seasonal harvests may mean that people earn most of their income is within a short time frame each year

Tracking these cycles can yield valuable information to design products and services, or to simply understand the mechanisms of how people manage finances over time.

Facilitate access to data

People often consider their financial information to be private and are reluctant to share it. Ethnography can help to overcome this barrier because researchers often spend enough time "in the field" to build relationships with their research participants and gain their trust. Participants have more time than usual to learn about the researcher and their work, and to ask questions about how the data will be used. Access to data therefore often comes about because researcher and participants have co-negotiated important personal and ethical issues.


Not always representative of a population at large

Ethnographers do not usually collect data based on representative samples. This means that, while their findings can count as "evidence," they not readily generalizable. The exception to this is comparative analysis, in which a range of cases (often produced by different researchers and at different times) are compared to spot patterns and build social theory.

A lack of representativeness is unlikely to present a problem for researchers who are seeking information on changing social conditions or sentiments. However, sectors of consumer finance that depend upon representative samples to make important decisions, such as policy implementation or development programs, may need to supplement ethnographic data with quantitative data.

Usually not replicable

Ethnographic studies are rarely replicable. This is because:

  • They involve the study of complex social phenomena that are prone to change rapidly
  • Gaining access to the same sets of people that participated in an original research project can be difficult: they may have moved or no longer have time to participate in an in-depth study

Studies that require replicability may be better suited to using structured interviews or surveys.


Some ethnography can be carried out in a matter of hours, but in most cases, the best results come from spending considerable time in the field. Whether ethnography is a viable method for a particular research question depends on what information is needed and the extent of resources available to conduct research.

For example, if a bank wants to investigate customer experiences of waiting in line, then a few hours or days may well be sufficient to produce the insights needed. However, observing customers' financial management from month to month would require a much longer study, with many more hours spent in the presence of the customer.

Case Study 1 — Transactions in Ethiopia: Direct observations of use of cash in sales

Direct observations can provide information about people's behaviour that is not accessible through any other method.

IMTFI researcher Woldmariam Mesfin Fikre used participant observation to collect data on open-air cash transactions in fourteen different marketplaces in Ethiopia (see his report). Markets are busy places, and so buyers and sellers depend upon shortcuts in order to make transactions quickly. Moreover, most of Mesfin's research participants were functionally illiterate and could not read the numbers or text on banknotes. He paid particular attention to:

  • Shortcuts buyers and sellers use to quickly tell currency values apart
  • Errors made by sellers in their calculations
  • How sellers divided up cash into different piles to assist their accounting

By focusing on these areas, Mesfin aimed to identify the common practices that merchants (sellers) and buyers (customers) perform.


Mesfin used observation techniques to collect data on how people counted, stored, and transacted with cash. He recorded these observations using a combination of field notes and (where appropriate and feasible) photography and video.

Mesfin explained to us the benefits of observation:

  • It helped him to quickly understand what respondents say about their practices
  • It enabled him and his respondents to establish is understandings since they could point to concrete details, such the design features of money or bags
  • Observation tended to raise new questions that may not have come up when using other methods

In order to confirm his observations, Mesfin also conducted interviews with his research participants. He cross-checked the data generated by each method (known as "triangulation") to ensure he had not misunderstood what was occurring. Mesfin's research is an example of a multimethod study.


Mesfin discovered that buyers and sellers identify currency notes according to their colour rather than by the numbers printed on them, and calculate their value accordingly. This is, in fact, a common practice in many countries, especially in those that use brightly-coloured notes. as is the case in Ethiopia. However, these kinds of shortcuts did not prevent errors of calculation. Due to time constraints and crowding, sellers were not always sure who had paid them or whether change was due.

Observations permitted Mesfin to observe the different methods of accounting that sellers used. Some sellers preferred to use a single bag for their money, whereas other sellers had a separate bag for each type of item they sold. For example, money from the sale of coffee would go into one bag, and money from the sale of salt would go into a second bag. When they provided change for an item, they would take it from the bag corresponding to that item.

Research participants admitted that this system sometimes made transactions overly complicated, but there were a few reasons why it was preferable. One was that when all of a seller's money was stored in one single bag it was at greater risk of theft. Another was that, in the absence of written records or cash registers, storing money in separate bags helped sellers to keep track of product movement:

Keeping these sales separate enables them to easily know the daily sales from each items, the net profit of each items and the most profitable items in their portfolios. (Mesfin 2014, p.4)

While research participants could theoretically explain these behaviours in interviews, observation overcomes many inaccuracies introduced by human recall or omission.


Insights such as these could be used to inform the development of new money-management products, such as a mobile money service that includes built-in features suitable for local contexts or particular users. For example, a mobile money service aimed at sellers could provide multiple wallets connected to the one account. This would allow users to continue to divide up cash into multiple piles.


As with many studies of money, Mesfin told us that he encountered ethical issues regarding data access:

Sometimes, as related to money, respondents do not feel comfortable opening up their money bags and let you see. If their bag contains little money they feel shame. (personal communication)

However, since Mesfin spent a significant amount of time at each research site, he reports that he developed trust and even friendship with the sellers in the market. He also reported that if others saw other people showing Mesfin what was in their bags, they felt confident to also participate in Mesfin's study.

For more about this study, see:

Case Study 2 — Debt in Guatemala: Using long-term ethnography to collect data

Some topics in consumer finance are difficult to research because data is private, widely dispersed, or not recorded using any accessible media. Ethnographic research can assist in overcoming these barriers because researchers piece together data from a wide variety of sources.

Moreover, ethnographers often revisit the same place for years or decades to carry out different research projects, meaning that they get to know a place and its people in detail. This makes it easier to identify how financial behaviours fit into larger social, cultural, and economic patterns.

A good example of this is David Stoll's research in Guatemala. Stoll has been carrying out research on political and economic issues in the highland Maya market town of Nebaj since 1987. In his book El Norte Or Bust!, Stoll describes how he watched Nebajenses become over-indebted as they speculated on migration to the United States. He describes the motivations behind people's decisions to take on debt, inter-group lending practices, and the role of microfinance agencies in stimulating the community's debt bubble.


Stoll carried out long-term ethnographic fieldwork beginning in 1987 and he generally returned to his fieldsite every year. Some of these trips were made to carry out a concrete research agenda; others were simply to visit and keep in touch. Stoll reports that long-term fieldwork had two advantages:

  • It permits him to stay connected to residents, building up trust and recognition
  • It allows him to observe how the community and its institutions changed over time, including generational change

Stoll began researching indebtedness in 2007 when he discovered that residents were becoming heavily indebted to microfinance institutions, banks, moneylenders, and to each other. Finding out why people were taking on so much debt involved:

  • Interviewing residents about their borrowing and lending
  • Observing interactions between family members, neighbours, and institutions
  • Working with a debt committee to tabulate the experiences of its members

Stoll's initial research involved trying to discover why people were becoming so indebted. As the picture became clearer, his research questions became more numerous and more specific, focusing especially on understanding why people would take on the risks associated with borrowing and lending.


Stoll's initial finding was that a drop in remittances from the U.S. was causing more people to default on their loans. As defaults rose, the town's lending institutions stopped making new loans, and defaults rose even higher. The price of local real estate, which had inflated enormously, suddenly collapsed.

Many households were taking on debt to fund illegal migration to the United States. From their onset in the late 1990s until 2006, the majority of these ventures had been successful. The families who stayed behind received money from their relatives who had migrated. Migrants were able to pay back the loans financing their trip and return with enough savings to buy a used motor vehicle, land, livestock, or to improve their homes.

From 2006 onward, migrants found it increasingly difficult to find enough employment in the U.S. to pay for their trip there, let alone send the remittances their families now expected.

Strangely, these increased failures did not immediately deter other residents from taking on debt to migrate themselves. Instead of shrinking, the bubble grew bigger for another year.

Stoll identified various factors that exacerbated risk-taking among borrowers:

  1. People were reluctant to believe that migration was no longer a successful strategy.
  2. Even if they did recognize the risk, they considered it to be one worth taking.
  3. Failed migrations meant that families would have to borrow even more money so that the aspiring migrant could make another attempt at crossing the border.
  4. The only way of paying back loans was to take out more loans.
  5. Some people took loans to lend to others in the hope of making a profit.

Among lenders, Stoll found the following:

  1. People would lend to each other to fulfil social obligations or with the hope of making a profit.
  2. Loan sharks charged high rates to cover the cost of the risk.
  3. Formal lenders, such as microfinance agencies, were not aware that their loans were being invested in migration or third-party lending activities.

Stoll reports that while he gained initial contacts through his local networks, strangers were also willing to talk candidly with him about their debts, admitting to their own faulty decisions as well as to instances in which they had been tricked or let down by others. However, no one person or institution had a good sense of the entire picture. By combining interviews, observations, and participation, Stoll pieced together the town's story of indebtedness.


Stoll's work has numerous applications in understanding and combating over-indebtedness. Stoll reports that while he was in the field he was able to assist both individuals and institutions by:

  • Helping one of the debt committees compile a list of problem cases
  • Paying for a local radio spot warning against the resurgence of a particular swindle
  • Paying some medical expenses for a crippled returnee
  • Providing advice for what he warned were unrealistic pitches to NGOs

There are many ways in which Stoll's findings could be applied. For example:

  • Knowledge of how debt is accumulated can assist regulators in deciding which kinds of institutions to license or in developing methods to combat loan sharks
  • NGOs could use his insights to develop financial literacy programs that focus particularly on the assessment of risk, not just on how to choose and use products
  • Microfinance institutions could adjust the processes by which they made lending decisions
  • Retail banks and other formal financial institutions could develop products that take residents' collective financial behaviours into account, as well as their individual behaviours


The fact that Stoll conducted long-term fieldwork meant that he was reasonably aware of the kinds of ethical issues that might occur. However, this did not guarantee that they could be avoided. Stoll told us:

The biggest ethical issue is my inability to provide financial assistance to the people who told me their stories. Even the smallest of the debts that were asking for my resources were on the order of $1 to $2,000 dollars. Per my human subjects protocol, I always introduced myself as an anthropologist whose job was to collect stories and publish books, not an NGO who could provide help. But because of the aura surrounding gringos, especially in a town upon which one NGO after another has descended, merely repeating this disclaimer did not vanish the hope that I might be able to help in some way. (personal communication)

He continued:

I have had my book translated into Spanish and circulated it via PDF to Nebajenses who have enough schooling to read it. I hope that it will encourage town authorities to discourage predatory money lending, crackdown on swindlers, and support victims through the legal system. (personal communication)

Stoll's assessment highlights various ethical problems that researchers studying indebtedness might encounter:

  1. Transparency about the aims and outcomes of research is an ethical obligation.
  2. However, there may be a gap between what researchers claim they do, and what participants think they do. This raises the possibility of unintentional coercion in which participants share information that they would not have otherwise given away.
  3. Research on vulnerable populations that does not result in tangible outcomes has questionable ethical value in the eyes of the population being studied.
  4. If research results in indirect assistance, participants may not associate it with the research and may feel exploited.

It should also be kept in mind that ethical issues change throughout the course of research, especially in long-term studies. What is problematic at the beginning of data collection may cease to be an issue down the track, and vice versa. Care therefore needs to be taken to regularly assess the current ethical issues.

For more about this study, see:

More about Ethnography

Research Methods in Anthropology: Qualitative and Quantitative Approaches by H. Russell Bernard (2011, AltaMira)

A Handbook of Practicing Anthropology edited by Riall Nolan (2013, Wiley-Blackwell)

Practical Ethnography: A Guide to Doing Ethnography in the Private Sector by Sam Ladner (2014, Left Coast Press)

Handbook of Narrative Inquiry: Mapping a Methodology edited by D. Jean Clandinin (2006, Sage)

Doing Anthropology in Consumer Research by Patricia L. Sunderland and Rita Mary Taylor Denny (2007, Left Coast Press)

Examples in consumer finance research