Experimental and ethnographic evidence on household-based lockboxes and savings nudges from rural Tanzania

Saving for the future is particularly difficult for low-income individuals with irregular incomes and no safe place to save. This paper assesses the impacts of an informal household-level savings intervention, a lockbox paired with local outreach to nudge participants to save, offered without an earmarking or commitment component. We selected 511 households using spatial random sampling to participate in a yearlong randomized stepped-wedge experiment in rural Tanzania. All participating households received two LPG cylinders with burners attached and every-other-week nudges to save from a locally trained worker. Households then were randomly assigned to receive the lockbox at different time points throughout the yearlong study. Take up of the lockbox was very high (∼99 % at the final visit), and treatment caused an additional 13 % (95 % CI: (10.7 %,15.4 %, p < 0.001) of participants to save within the next two weeks, compared to control. We find that this higher saving rate holds but does not increase with time in treatment. After the every-other-week survey period, we conducted 90 interviews, numerous focus groups/budget games, and observation for an additional six months of fieldwork to explain our quantitative findings. Although all household members could deposit, women saved alone in the lockbox and most opted not to keep the key themselves. Individuals within the household had gender-specific financial domains for which they saved separately and without explicit bargaining. The lockbox enabled saving, served as a physical reminder to save, and altered how women came to see tiny amounts of money. The struggle to save was neither from a lack of self-control nor from temptation, but primarily from the reality that women were solely responsible for all everyday household expenses.