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Why Don't the Poor Save More? Evidence from Health Savings Experiments

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  • Pascaline Dupas
  • Jonathan Robinson

Abstract

Using data from a field experiment in Kenya, we document that providing individuals with simple informal savings technologies can substantially increase investment in preventative health and reduce vulnerability to health shocks. Simply providing a safe place to keep money was sufficient to increase health savings by 66 percent. Adding an earmarking feature was only helpful when funds were put toward emergencies, or for individuals that are frequently taxed by friends and relatives. Group-based savings and credit schemes had very large effects.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.103.4.1138
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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 103 (2013)
Issue (Month): 4 (June)
Pages: 1138-71

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Handle: RePEc:aea:aecrev:v:103:y:2013:i:4:p:1138-71

Note: DOI: 10.1257/aer.103.4.1138
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References

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  1. Nava Ashaf & Dean Karlan & Wesley Yin, 2004. "Tying odysseus to the mast: Evidence from a commitment savings product in the philippines," Natural Field Experiments 00206, The Field Experiments Website.
  2. Nava Ashaf & Dean Karlan & Wesley Yin, 2006. "Household decision making and savings impacts: Further evidence from a commitment savings product in the philippines," Natural Field Experiments 00207, The Field Experiments Website.
  3. Michal Bauer & Julie Chytilová & Jonathan Morduch, 2008. "Behavioral Foundations of Microcredit: Experimental and Survey Evidence From Rural India," Working Papers IES 2008/28, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Nov 2008.
  4. Marcel Fafchamps & David McKenzie & Simon R. Quinn & Christopher Woodruff, 2011. "When is capital enough to get female microenterprises growing? Evidence from a randomized experiment in Ghana," NBER Working Papers 17207, National Bureau of Economic Research, Inc.
  5. Alessandro Tarozzi & Aprajit Mahajan & Brian Blackburn & Dan Kopf & Lakshmi Krishnan & Joanne Yoong, 2011. "Micro-loans, Insecticide-Treated Bednets and Malaria:Evidence from a Randomized Controlled Trial in Orissa (India)," Working Papers id:3915, eSocialSciences.
  6. Pascaline Dupas & Jonathan Robinson, 2013. "Savings Constraints and Microenterprise Development: Evidence from a Field Experiment in Kenya," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 163-92, January.
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  9. Pascaline Dupas, 2010. "Short-Run Subsidies and Long-Run Adoption of New Health Products: Evidence from a Field Experiment," NBER Working Papers 16298, National Bureau of Economic Research, Inc.
  10. Karlan, Dean S. & McConnell, Margaret & Mullainathan, Sendhil & Zinman, Jonathan, 2010. "Getting to the Top of Mind: How Reminders Increase Saving," CEPR Discussion Papers 7907, C.E.P.R. Discussion Papers.
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  16. Brune, Lasse & Gine, Xavier & Goldberg, Jessica & Yang, Dean, 2011. "Commitments to save : a field experiment in rural Malawi," Policy Research Working Paper Series 5748, The World Bank.
  17. Kast, Felipe & Meier, Stephan & Pomeranz, Dina, 2012. "Under-Savers Anonymous: Evidence on Self-Help Groups and Peer Pressure as a Savings Commitment Device," IZA Discussion Papers 6311, Institute for the Study of Labor (IZA).
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Citations

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Cited by:
  1. Demombynes, Gabriel & Thegeya, Aaron, 2012. "Kenya's mobile revolution and the promise of mobile savings," Policy Research Working Paper Series 5988, The World Bank.
  2. Jennifer M. Meredith & Jonathan Robinson & Sarah Walker & Bruce Wydick, 2013. "Keeping the Doctor Away: Experimental Evidence on Investment in Preventative Health Products," NBER Working Papers 19312, National Bureau of Economic Research, Inc.
  3. Brune, Lasse & Gine, Xavier & Goldberg, Jessica & Yang, Dean, 2011. "Commitments to save : a field experiment in rural Malawi," Policy Research Working Paper Series 5748, The World Bank.
  4. Aruna Chandra & Thankom Arun, 2011. "United States Microfinance: Regulating to Promote Growth?," NFI Working Papers 2011-WP-28, Indiana State University, Scott College of Business, Networks Financial Institute.
  5. Clemens, Michael A. & Tiongson, Erwin R., 2012. "Split Decisions: Family Finance when a Policy Discontinuity Allocates Overseas Work," IZA Discussion Papers 7028, Institute for the Study of Labor (IZA).
  6. Bengtsson, Niklas & Pettersson, Jan, 2012. "The Outreach and Sustainability of Microfinance: Is There a Tradeoff?," Working Paper Series, Center for Labor Studies 2012:18, Uppsala University, Department of Economics.
  7. Pascaline Dupas & Sarah Green & Anthony Keats & Jonathan Robinson, 2012. "Challenges in Banking the Rural Poor: Evidence from Kenya's Western Province," NBER Working Papers 17851, National Bureau of Economic Research, Inc.
  8. Bryan, Gharad & Chowdhury, Shyamal & Mobarak, Ahmed Mushfiq, 2012. "Seasonal Migration and Risk Aversion," CEPR Discussion Papers 8739, C.E.P.R. Discussion Papers.
  9. Demirguc-Kunt, Asli & Klapper, Leora, 2012. "Measuring financial inclusion : the Global Findex Database," Policy Research Working Paper Series 6025, The World Bank.
  10. Brigitte C. Madrian, 2012. "Matching Contributions and Savings Outcomes: A Behavioral Economics Perspective," NBER Working Papers 18220, National Bureau of Economic Research, Inc.
  11. Diego Ubfal, 2013. "How General Are Time Preferences? Eliciting Good-Specific Discount Rates," Working Papers 473, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  12. Kast, Felipe & Meier, Stephan & Pomeranz, Dina, 2012. "Under-Savers Anonymous: Evidence on Self-Help Groups and Peer Pressure as a Savings Commitment Device," IZA Discussion Papers 6311, Institute for the Study of Labor (IZA).
  13. Aggarwal, Shilpa & Klapper, Leora & Singer, Dorothe, 2012. "Financing businesses in Africa : the role of microfinance," Policy Research Working Paper Series 5975, The World Bank.
  14. Thorsten Beck & Haki Pamuk & Burak R. Uras, 2014. "Entrepreneurial Saving Practices and Reinvestment: Theory and Evidence from Tanzanian MSEs," CSAE Working Paper Series 2014-15, Centre for the Study of African Economies, University of Oxford.
  15. B. Douglas Bernheim & Jonathan Meer & Neva K. Novarro, 2012. "Do Consumers Exploit Precommitment Opportunities? Evidence from Natural Experiments Involving Liquor Consumption," NBER Working Papers 17762, National Bureau of Economic Research, Inc.
  16. Gharad Bryan & Shyamal Chowdhury & Ahmed Mushfiq Mobarak, 2014. "Under-investment in a Profitable Technology: The Case of Seasonal Migration in Bangladesh," NBER Working Papers 20172, National Bureau of Economic Research, Inc.
  17. Matteo Marinangeli & Andrea Filippo Presbitero, 2011. "Can the Poor Save More? Evidence from Bangladesh," Mo.Fi.R. Working Papers 57, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.

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