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

Author

Listed:
  • 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.

Suggested Citation

  • Nava Ashraf & Dean Karlan & Wesley Yin, 2006. "Household Decision Making and Savings Impacts: Further Evidence from a Commitment Savings Product in the Philippines," Working Papers 939, Economic Growth Center, Yale University.
  • Handle: RePEc:egc:wpaper:939
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    File URL: http://www.econ.yale.edu/growth_pdf/cdp939.pdf
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    Cited by:

    1. Dalla Pellegrina, Lucia & De Michele, Angela & Di Maio, Giorgio & Landoni, Paolo, 2021. "Fostering savings by commitment: Evidence from a quasi-natural experiment at The Small Enterprise Foundation in South Africa," World Development, Elsevier, vol. 148(C).
    2. Jos Vaessen & Ana Rivas & Maren Duvendack & Richard Palmer Jones & Frans Leeuw & Ger van Gils & Ruslan Lukach & Nathalie Holvoet & Johan Bastiaensen & Jorge Garcia Hombrados & Hugh Waddington, 2014. "The Effects of Microcredit on Women's Control over Household Spending in Developing Countries: A Systematic Review and Meta‐analysis," Campbell Systematic Reviews, John Wiley & Sons, vol. 10(1), pages 1-205.
    3. Levin, Mark (Левин, Марк) & Matrosova, Ksenia (Матросова, Ксения), 2018. "Development and Research of Economic Behavior of Households in Changing Conditions [Разработка И Исследование Экономического Поведения Домохозяйств В Изменяющихся Условиях]," Working Papers 041825, Russian Presidential Academy of National Economy and Public Administration.
    4. 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 1138-1171, June.
    5. Edgar E. Twine & Elizaphan J. O. Rao & Isabelle Baltenweck & Amos O. Omore, 2019. "Are Technology Adoption and Collective Action Important in Accessing Credit? Evidence from Milk Producers in Tanzania," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 31(3), pages 388-412, July.
    6. Beck, Thorsten & de la Torre, Augusto, 2006. "The basic analytics of access to financial services," Policy Research Working Paper Series 4026, The World Bank.

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    More about this item

    Keywords

    Savings; Microfinance; Female empowerment; Household Decision making; Commitment;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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