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Under-savers anonymous: evidence on self-help groups and peer pressure as a savings commitment device


Kast, Felipe; Pomeranz, Dina; Meier, Stephan (2012). Under-savers anonymous: evidence on self-help groups and peer pressure as a savings commitment device. NBER working paper series 18417, National Bureau of Economic Research.

Abstract

We test the effectiveness of self-help peer groups as a commitment device for precautionary savings, through two randomized field experiments among 2,687 microentrepreneurs in Chile. The first experiment finds that self-help peer groups are a powerful tool to increase savings (the number of deposits grows 3.5-fold and the average savings balance almost doubles). Conversely, a substantially higher interest rate has no effect on most participants. A second experiment tests an alternative delivery mechanism and shows that effects of a similar size can be achieved by holding people accountable through feedback text messages, without any meetings or peer pressure.

Abstract

We test the effectiveness of self-help peer groups as a commitment device for precautionary savings, through two randomized field experiments among 2,687 microentrepreneurs in Chile. The first experiment finds that self-help peer groups are a powerful tool to increase savings (the number of deposits grows 3.5-fold and the average savings balance almost doubles). Conversely, a substantially higher interest rate has no effect on most participants. A second experiment tests an alternative delivery mechanism and shows that effects of a similar size can be achieved by holding people accountable through feedback text messages, without any meetings or peer pressure.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:D00, D03, D11, D12, D14, E2, E20, E21, O2, O20, O54, Z18
Language:English
Date:October 2012
Deposited On:26 Apr 2017 12:22
Last Modified:04 Jun 2017 18:44
Series Name:NBER working paper series
Number of Pages:46
Free access at:Official URL. An embargo period may apply.
Official URL:http://www.nber.org/papers/w18417
Related URLs:http://www.nber.org/papers.html

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