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Household Decision Making and Savings Impacts: Further Evidence from a Commitment Savings Product in the Philippines

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  • Nava Ashraf

    ()
    (Harvard Business School)

  • Dean Karlan

    ()
    (Economic Growth Center, Yale University)

  • Wesley Yin

    ()
    (University of Chicago)

Abstract

Commitment devices for savings could benefit those with self-control as well as familial or spousal control issues. We find evidence to support both motivations. We examine the impact of a commitment savings product in the Philippines on household decision making power and self-perception of savings behavior, as well as actual savings. The product leads to more decision making power in the household for women, and likewise more purchases of female-oriented durable goods. We also find that the product leads women who appear time-inconsistent in a baseline survey to self-report being a disciplined saver in the follow-up survey. For impact on savings balances, we find that the 81% increase in savings after one year did not crowd out savings held outside of the participating bank, but that the longer-term impact over two and a half years on bank savings dissipated to only a 33% increase, which is no longer statistically significant. We discuss reasons why the effect dissipated and the implications for designing and implementing sustainable, equilibrium-shifting interventions.

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Bibliographic Info

Paper provided by Economic Growth Center, Yale University in its series Working Papers with number 939.

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Length: 27 pages
Date of creation: Jun 2006
Date of revision:
Handle: RePEc:egc:wpaper:939

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Keywords: Savings; Microfinance; Female empowerment; Household Decision making; Commitment;

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References

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Cited by:
  1. Pascaline Dupas & Jonathan Robinson, 2013. "Why Don't the Poor Save More? Evidence from Health Savings Experiments," American Economic Review, American Economic Association, vol. 103(4), pages 1138-71, June.
  2. Beck, T.H.L. & Torre, A. de la, 2007. "The basic analytics of access to financial services," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3125424, Tilburg University.

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