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

Last registered on April 26, 2016
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Pre-Trial

Trial Information

General Information

Title
Why Don’t the Poor Save More? Evidence from Health Savings Experiments
RCT ID
AEARCTR-0001169
Initial registration date
April 26, 2016

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
April 26, 2016, 6:08 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
Kenya
Region
Africa

Primary Investigator

Name
Pascaline Dupas
Affiliation
Princeton University
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Other Primary Investigator(s)

PI Name
Jonathan Robinson
PI Affiliation
Economics Department, University of California at Santa Cruz
Contact Investigator

Additional Trial Information

Status
Completed
Start date
2008-05-01
End date
2011-05-31
Keywords
Finance & Microfinance, Health
Additional Keywords
health savings, ROSCAs, Rotating Savings and Credit Association, health pot, lock box, safe box, health savings account, HSA, commitment device, savings technology, Kenya
JEL code(s)
C93, D14, D91, I12, O12
Secondary IDs
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 by 66 percent. Adding an earmarking feature was only helpful when funds were put toward emergencies, or for individuals that are frequently taxed by friends and relatives. Group-based savings and credit schemes had very large effects.
External Link(s)
J-PAL Evaluation Summary

Registration Citation

Citation
Dupas, Pascaline and Jonathan Robinson. 2016. "Why Don’t the Poor Save More? Evidence from Health Savings Experiments." AEA RCT Registry. April 26. https://doi.org/10.1257/rct.1169-1.0
Former Citation
Dupas, Pascaline and Jonathan Robinson. 2016. "Why Don’t the Poor Save More? Evidence from Health Savings Experiments." AEA RCT Registry. April 26. https://www.socialscienceregistry.org/trials/1169/history/7916
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
The trial uses a sample size of 113 ROSCAs (Rotating Savings and Credit Association), with an average of 17 members each, and assigns them to either a control group or one of four savings technologies. The savings technologies are:

1) Safe Box: a metal box with a key and slit on top. Participants were asked to save towards a specific health goal, but the participant had the key and was free to deposit and take out the money.

2) Lockbox: same as the Safe Box, but the key was with a program officer thus participants did not have access to the money. Once the saving goal was reached, the program officer would meet the participant and open the Lockbox at the shop where the product could be purchased.

3) Health Pot: Uses the same rotating savings structure of a ROSCA but created a side pot that the members contributed to in addition to the regular ROSCA pot. As with the regular pot, people contributed to the health pot at each meeting, the only difference being that this pot was earmarked for a specific health product. Although, the health product would be purchased individually, all members agreed to save towards the same product so that contribution amounts and cycle lengths did not vary across people.

4) Health Savings Account: Also uses the ROSCA structure where each member was encouraged to make regular deposits with the ROSCA treasurer. The funds deposited were earmarked for health. ROSCA treasurers were encouraged to not allow withdrawals unless the participant needed money for health expenditures.
Intervention Start Date
2008-08-01
Intervention End Date
2009-10-31

Primary Outcomes

Primary Outcomes (end points)
(i) Take- up of savings technology
(ii) Impact on health investment
(iii) Long term usage and diffusion effects
Primary Outcomes (explanation)
(i) Take up measured directly at 6 and 12 months after the intervention.
(ii) Impact on health investment measured by:
a) how much the individual spent on preventative health products in the year between baseline and endline.
b) whether the individual had to forgo medical treatment over the past three months for herself or a family member due to lack of cash
c) whether the respondent reached her baseline savings goal
(iii) Long term usage, measured 33 months after project started, checked what percentage of treatment groups was still using the technology. Additionally, to check to for diffusion effects, the adoption of the technologies on the control group was measured.

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Participants in both control and treatment ROSCAs were given information about preventative health products (such as bednets, water chlorination products, and ceramic water filters) and were encouraged to save toward investing in them. Since the control group was given the exact same information and encouragement as the treatment groups, any observed post-treatment differences in health investments across groups is interpreted as the impacts of the saving technologies introduced, rather than as differences in encouragement. For this reason, the comparison group should be thought of as an “Encouragement Group” rather than as a pure control which received no intervention whatsoever. In the four treatment groups, the savings devices were introduced and explained right after the encouragement was provided.

A random subset of ROSCA members was sampled for baseline data collection during the same meeting at which the encouragement and treatment offer (when applicable) were provided. Two follow-up surveys were conducted: a midline after six months and an endline after one year. Long term usage survey was conducted 33 months after intervention.
Experimental Design Details
Randomization Method
Randomization done in office by a computer
Randomization Unit
ROSCA group.
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
113 ROSCAs
Sample size: planned number of observations
833 ROSCA members
Sample size (or number of clusters) by treatment arms
Control: 18 ROSCAs
Treatment (Safe box): 20 ROSCAs
Treatment (Lock box): 26 ROSCAs
Treatment (Health Pot): 23 ROSCAs
Treatment (Health Saving Account): 26 ROSCAs
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials

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IRB

Institutional Review Boards (IRBs)

IRB Name
KEMRI/Kenya National Ethical Review Committee
IRB Approval Date
2008-10-13
IRB Approval Number
NONSSC094
IRB Name
University of California, Los Angeles (UCLA)
IRB Approval Date
2008-11-13
IRB Approval Number
G08-09-082-01
IRB Name
Innovations for Poverty Action (IPA) Kenya
IRB Approval Date
2008-07-03
IRB Approval Number
N/A
IRB Name
UC Santa Cruz
IRB Approval Date
2008-06-12
IRB Approval Number
1202
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
October 31, 2009, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
May 31, 2011, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
113 ROSCAs
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
771 ROSCA members with data on primary outcome at 12-month follow-up
Final Sample Size (or Number of Clusters) by Treatment Arms
Control: 18 ROSCAs Treatment (Safe box): 20 ROSCAs Treatment (Lock box): 26 ROSCAs Treatment (Health Pot): 23 ROSCAs Treatment (Health Saving Account): 26 ROSCAs
Data Publication

Data Publication

Is public data available?
Yes
Public Data URL
http://www.aeaweb.org/aer/data/june2013/20110911_data.zip

Program Files

Program Files
Yes
Program Files URL
http://www.aeaweb.org/aer/data/june2013/20110911_data.zip
Reports, Papers & Other Materials

Relevant Paper(s)

Abstract
WHY DON’T THE POOR SAVE MORE? EVIDENCE FROM HEALTH SAVINGS EXPERIMENTS

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 by 66 percent. Adding an earmarking feature was only helpful when funds were put toward emergencies, or for individuals that are frequently taxed by friends and relatives. Group-based savings and credit schemes had very large effects.
Citation
Dupas, Pascaline, and Jonathan Robinson. 2013. "Why Don’t the Poor Save More? Evidence from Health Savings Experiments." American Economic Review 103(4): 1138-71.
URL
https://www.povertyactionlab.org/sites/default/files/publications/432_91%20Saving%20for%20Health%20with%20ROSCAS%20AER%202013.pdf

Reports & Other Materials