Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/98372
Authors: 
Ashraf, Nava
Karlan, Dean S.
Yin, Wesley
Year of Publication: 
2005
Series/Report no.: 
Center Discussion Paper 917
Abstract: 
We designed a commitment savings product for a Philippine bank and implemented it using a randomized control methodology. The savings product was intended for individuals who want to commit now to restrict access to their savings, and who were sophisticated enough to engage in such a mechanism. We conducted a baseline survey on 1777 existing or former clients of a bank. One month later, we offered the commitment product to a randomly chosen subset of 710 clients; 202 (28.4 percent) accepted the offer and opened the account. In the baseline survey, we asked hypothetical time discounting questions. Women who exhibited a lower discount rate for future relative to current tradeoffs, and hence potentially have a preference for commitment, were indeed significantly more likely to open the commitment savings account. After twelve months, average savings balances increased by 81 percentage points for those clients assigned to the treatment group relative to those assigned to the control group. We conclude that the savings response represents a lasting change in savings, and not merely a short-term response to a new product.
Subjects: 
Savings
commitment
hyperbolic preferences
microfinance
development economics
program evaluation
field experiment
self-control
JEL: 
C93
D01
D11
D12
D14
D81
D91
G11
O12
Document Type: 
Working Paper

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