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

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  • Dupas, Pascaline
  • Robinson, Jonathan

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, through a mental accounting effect. Adding an earmarking feature was only helpful when funds were put towards emergencies; earmarking for preventative health reduced savings on average, because the liquidity cost of tying up money was too great. Providing social pressure and credit through a ROSCA-based savings scheme had very large effects.

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  • Dupas, Pascaline & Robinson, Jonathan, 2012. "Why Don't the Poor Save More? Evidence from Health Savings Experiments," Santa Cruz Department of Economics, Working Paper Series qt94w3m4r9, Department of Economics, UC Santa Cruz.
    • Handle: RePEc:cdl:ucscec:qt94w3m4r9
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    2. Clot, Sophie & Andriamahefazafy, Fano & Grolleau, Gilles & Ibanez, Lisette & Méral, Philippe, 2015. "Compensation and Rewards for Environmental Services (CRES) and efficient design of contracts in developing countries. Behavioral insights from a natural field experiment," Ecological Economics, Elsevier, vol. 113(C), pages 85-96.
    3. Michael Clemens & Erwin Tiongson, 2012. "Split Decisions: Family finance when a policy discontinuity allocates overseas work," RFBerlin Discussion Paper Series 1234, Rockwool Foundation Berlin (RF Berlin).
    4. Cazor Katz, Andre & Acuña, Hector & Carrasco, Diego & Carrasco, Martín, 2017. "Transferencias como Canal de Ventaja Electoral: El Caso de Chile [Discretionary Government Transfers to Catch Votes: The Case of Chile]," MPRA Paper 83668, University Library of Munich, Germany.
    5. 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.
    6. Dupas, Pascaline & Robinson, Jonathan, 2012. "The (hidden) costs of political instability: Evidence from Kenya's 2007 election crisis," Journal of Development Economics, Elsevier, vol. 99(2), pages 314-329.

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