Do Opposites Detract? Intrahousehold Preference Heterogeneity and Inefficient Strategic Savings

Last registered on June 23, 2016

Pre-Trial

Trial Information

General Information

Title
Do Opposites Detract? Intrahousehold Preference Heterogeneity and Inefficient Strategic Savings
RCT ID
AEARCTR-0001358
Initial registration date
June 23, 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
June 23, 2016, 2:44 PM EDT

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

Locations

Region

Primary Investigator

Affiliation
University of Southern California

Other Primary Investigator(s)

Additional Trial Information

Status
Completed
Start date
2009-05-01
End date
2012-12-31
Secondary IDs
Abstract
This paper uses a field experiment to test whether intrahousehold heterogeneity in discount factors leads to inefficient strategic savings behavior. I gave married couples in rural Kenya the opportunity to open both joint and individual bank accounts at randomly assigned interest rates. I also directly elicited discount factors for all individuals in the experiment. Couples who are well matched on discount factors are less likely to use costly individual accounts and respond robustly to relative rates of return between accounts, while their poorly matched peers do not. Consequently, poorly matched couples forgo significantly more interest earnings on their savings.
External Link(s)

Registration Citation

Citation
Schaner, Simone. 2016. "Do Opposites Detract? Intrahousehold Preference Heterogeneity and Inefficient Strategic Savings." AEA RCT Registry. June 23. https://doi.org/10.1257/rct.1358-1.0
Former Citation
Schaner, Simone. 2016. "Do Opposites Detract? Intrahousehold Preference Heterogeneity and Inefficient Strategic Savings." AEA RCT Registry. June 23. https://www.socialscienceregistry.org/trials/1358/history/9004
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
To test whether differences in intrahousehold discount factors results in inefficient savings, sample couples were given the opportunity to open up to three bank accounts at the Family Bank in Kenya: a joint account, an individual account for the husband, and/or an individual account for the wife. Before the offer, each account was randomly assigned to qualify for one of four temporary, six-month interest rates. An individual account could bear 0, 2, 6, or 10 percent 6-month yields and joint accounts could bear 2, 6 or 10 percent 6-month interest rates. The interest rates were purposely chosen to exceed market rates by a large margin, with the hope that they would encourage account use and increase savings. After the six-month interest rate expired, researchers measured take-up, account use, savings behavior, and economic impacts for individual and joint account holders. Researchers measured the same outcomes again after another two and a half years to understand the long-term effects of the interest rate subsidies.

In order to test whether the ability to hide savings was an important driver of individual account use, 50 percent of participating couples were randomly selected for an "extra statements" offer. If a selected couple decided to open an individual account for (without loss of generality) spouse A , the enumerator processing the couple’s paperwork asked if the spouses would consent to allow spouse B to receive extra statement cards. The cards, if presented by spouse B at the bank, entitled him or her to learn the current balance of spouse A ’s account. These cards were only valid for 6 months, and were not given to couples unless both spouses gave their consent.
Intervention Start Date
2009-05-01
Intervention End Date
2009-11-30

Primary Outcomes

Primary Outcomes (end points)
1) Account opening
2) Account savings
Primary Outcomes (explanation)
1) Account opening: Whether participants opened individual or joint accounts
2) Account savings: how much savings were accumulated
The data is collected from baseline survey and bank administrative data.

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The study was conducted in the town of Busia in Western Province, Kenya with communities surrounding the Family Bank in Busia. Communities around the town’s 19 primary schools were chosen so that the school could serve as a meeting place. Trained field officers issued meeting invitations to married couples where (i) neither spouse had an account with Family Bank, but at least one spouse was potentially interested in opening one; and (ii) both spouses had national ID cards and were able to attend the meeting.

Couples who attended the meeting were given the offer to open one of three account types with the special six-month interest rate. The minimum operating balance of 100 Ksh was provided by the researcher making opening the account costless. A baseline survey was administered where the interest rate was randomly assigned by couples drawing envelopes. At the baseline survey, the degree of time preference was elicited using choices between different amounts of money at different times, as opposed to different amounts of goods at different times.
Experimental Design Details
Randomization Method
Couples were randomly allocated the interest rates and extra statements. Respondents drew envelopes containing cards with the interest rates from tins. The color of the joint interest rate card determined whether or not a couple was selected for extra statements.
Randomization Unit
Individual interest rates were randomized at the individual level, joint interest rates and extra statements were randomized at the couple level.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
Study not clustered
Sample size: planned number of observations
598 married couples
Sample size (or number of clusters) by treatment arms
Husband's interest rate: 0%=161, 2%=153, 6%=145, 10%=139
Wife's interest rate: 0%=138, 2%=159, 6%=158, 10%=143
Joint interest rate: 2%=195, 6%=212, 10%=191
Extra statements: No/Control=370, Yes=228
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
Kenya Medical Research Institute
IRB Approval Date
2012-07-02
IRB Approval Number
340
IRB Name
Dartmouth College
IRB Approval Date
2012-04-19
IRB Approval Number
23342
IRB Name
MIT
IRB Approval Date
2009-01-15
IRB Approval Number
0812003050
IRB Name
Kenya Medical Research Institute
IRB Approval Date
2009-06-08
IRB Approval Number
129
Analysis Plan

Analysis Plan Documents

Preanalysis Readme

MD5: 11b3dba4bf625eb0ae5fb802e925b466

SHA1: 9d8cf801a6e5ecfad7e3070a4931c1592fae28d5

Uploaded At: June 23, 2016

Preanalysis Document

MD5: c38cd924eb4d19351879c997ef677210

SHA1: 69fefc040e42f1f8b0f0b32b6052c2497c09b7a3

Uploaded At: June 23, 2016

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
November 30, 2009, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
December 31, 2012, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
544 couples
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
544 married couples
Final Sample Size (or Number of Clusters) by Treatment Arms
Husband's interest rate: 0%=144, 2%=138, 6%=136, 10%=126 Wife's interest rate: 0%=127, 2%=146, 6%=142, 10%=129 Joint interest rate: 2%=177, 6%=190, 10%=177 Extra statements: No/Control=337, Yes=207
Data Publication

Data Publication

Is public data available?
Yes

Program Files

Program Files
Yes
Reports, Papers & Other Materials

Relevant Paper(s)

Abstract
DO OPPOSITES DETRACT? INTRAHOUSEHOLD PREFERENCE HETEROGENEITY AND INEFFICIENT STRATEGIC SAVINGS

This paper uses a field experiment to test whether intrahousehold heterogeneity in discount factors leads to inefficient strategic savings behavior. I gave married couples in rural Kenya the opportunity to open both joint and individual bank accounts at randomly assigned interest rates. I also directly elicited discount factors for all individuals in the experiment. Couples who are well matched on discount factors are less likely to use costly individual accounts and respond robustly to relative rates of return between accounts, while their poorly matched peers do not. Consequently, poorly matched couples forgo significantly more interest earnings on their savings.

Citation
Schaner, Simone. 2015. "Do Opposites Detract? Intrahousehold Preference Heterogeneity and Inefficient Strategic Savings." American Economic Journal: Applied Economics 7(2): 135–174.

Reports & Other Materials