Field
Abstract
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Before
We report on a field experiment using several methods for collecting deposits made in formal bank accounts in rural areas in Sri Lanka. We find that only frequent, face-to-face collection increases aggregate household savings. Collection involving community lock boxes increases balances at the collecting bank, but not overall household savings. Only community box collection appears to have the possibility of being financially viable. The various collection methods allow us to unbundle the role of frequency, salience and habit formation in deposit decisions. We find that frequency and salience affect the number of transactions, but not the level of savings.
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After
We report on a field experiment using several methods for collecting deposits made in formal bank accounts in rural areas in Sri Lanka. We find that only frequent, face-to-face collection increases aggregate household savings. Collection involving community lock boxes increases balances at the collecting bank, but not overall household savings. Only community box collection appears to have the possibility of being financially viable. The various collection methods allow us to unbundle the role of frequency, salience and habit formation in deposit decisions. We find that frequency and salience affect the number of transactions, but not the level of savings.
An additional analysis of the data by Callen, De Mel, McIntosh, and Woodruff (2014) examines the how the change in financial services affects an individual’s optimal allocation of time between leisure and labor, and then between wage work and self-employment. In this context, the headwaters of formal savings are to be found in sacrificed leisure time: households work more, and work more on the wage market when savings options improve. These results suggest that the labor allocation channel is an important mechanism linking savings opportunities to income.
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Field
Last Published
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Before
September 28, 2016 06:10 PM
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After
October 19, 2016 02:49 AM
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Field
Primary Outcomes (End Points)
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Before
Savings per month, transactions per month, deposits per month, withdrawals per month
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After
Savings per month, Transactions per month, Deposits per month, Withdrawals per month, Income earned, Hours worked, Employment (Self/Wage), Time allocation (Labor/Leisure), Expenditures, Consumption
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