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Consumer Demand for Prize-Linked Savings: A Preliminary Analysis

Author

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  • Peter Tufano

    (Harvard Business School, Finance Unit)

  • Nick Maynard

    (D2D Fund)

  • Jan-Emmanuel De Neve

    (Harvard Business School)

Abstract

This paper reports on a small-scale survey of the potential American demand for prize-linked savings accounts, an account that awards prizes as part of the saving product’s return. In October 2006, Centra Credit Union launched a prize-linked savings pilot. As part of that initiative, we conducted a mall intercept survey of over 500 people in Clarksville, Indiana, the community where the program was launched. This preliminary data suggests that low-to-moderate income Americans may have substantial demand for prize-linked savings, with a majority of survey participants expressing an interest in opening a prize-linked savings account. As predicted by theory and international experience, interest in prize-linked savings is greatest among people who do not have regular saving habits, who have little actual savings, who play lotteries extensively, and who are optimistic about their futures.

Suggested Citation

  • Peter Tufano & Nick Maynard & Jan-Emmanuel De Neve, 2008. "Consumer Demand for Prize-Linked Savings: A Preliminary Analysis," Harvard Business School Working Papers 08-061, Harvard Business School.
    • Handle: RePEc:hbs:wpaper:08-061
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    Cited by:

    1. Shawn Cole & Benjamin Iverson & Peter Tufano, 2022. "Can Gambling Increase Savings? Empirical Evidence on Prize-Linked Savings Accounts," Management Science, INFORMS, vol. 68(5), pages 3282-3308, May.
    2. Melissa Schettini Kearney & Peter Tufano & Jonathan Guryan & Erik Hurst, 2010. "Making Savers Winners: An Overview of Prize-Linked Savings Products," NBER Working Papers 16433, National Bureau of Economic Research, Inc.

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