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

  • Pascaline Dupas
  • Jonathan Robinson

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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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17255.

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Date of creation: Jul 2011
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Publication status: published as 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.
Handle: RePEc:nbr:nberwo:17255
Note: CH HE
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