Every Payment Counts: Prize-Linked Debt Reduction
Last registered on May 18, 2018

Pre-Trial

Trial Information
General Information
Title
Every Payment Counts: Prize-Linked Debt Reduction
RCT ID
AEARCTR-0001673
Initial registration date
November 08, 2016
Last updated
May 18, 2018 9:59 AM EDT
Location(s)

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Primary Investigator
Affiliation
RAND
Other Primary Investigator(s)
Additional Trial Information
Status
On going
Start date
2015-10-01
End date
2019-06-01
Secondary IDs
Abstract
Can prize-linked incentives improve financial behavior? We are working with a large not-for-profit credit counseling agency to examine whether lottery linked incentives can improve debt repayment behavior. Randomly selected participants in the credit counseling agency's debt management plan (DMP) are receiving access to a program that links on-time debt repayment behavior with a small chance of debt forgiveness. We plan to evaluate the impacts of prize-linked incentives on DMP retention, debt reduction, defaults, delinquencies and programmatic financial self-sustainability.
External Link(s)
Registration Citation
Citation
Burke, Jeremy. 2018. "Every Payment Counts: Prize-Linked Debt Reduction." AEA RCT Registry. May 18. https://www.socialscienceregistry.org/trials/1673/history/29684
Experimental Details
Interventions
Intervention(s)
Intervention Start Date
2016-01-01
Intervention End Date
2017-01-01
Primary Outcomes
Primary Outcomes (end points)
1) Timely debt repayment, including percentage of on-time monthly DMP payments and percentage of monthly DMP payments made in full;
2) Total debt;
3) DMP retention;
4) Credit access, including FICO score, number of open credit lines, percentage of credit utilization, debt balance, delinquencies and collections, debt payments and interest paid on other loans
4) Programmatic financial self-sufficiency
Primary Outcomes (explanation)
We will examine whether increased revenue through increased retention and reduced delinquency offset the amount of money awarded in prizes
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
Study participants were randomized into one of two groups: 1) Control: These clients will not receive an offer to participate in the PLDR program. 2) Treatment: These clients will receive an offer to participate in the PLDR program. Enrolled participants that make their full payment are entered into monthly drawings, and a Grand Prize drawing at the end of the year.The prizes will go directly towards repayment of the client's debt management plan (DMP). Participating clients will also receive monthly emails from the agency, which will include information about the previous month's winner and a reminder about upcoming drawings. To participate, treatment clients must actively opt-in via phone or email.
Experimental Design Details
Not available
Randomization Method
Individual clients were randomized in Stata. Randomization depended on the client’s DMP start date; clients who started a DMP between January through March 2014 and January through March 2015 were batch randomized in December 2015. Clients who started a DMP between January through March 2016 were randomized on a rolling, weekly basis based on enrollment information from the partner.
Randomization Unit
Client
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
6800 clients
Sample size: planned number of observations
6800 clients
Sample size (or number of clusters) by treatment arms
3,477 control clients and 3,511 treatment clients
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
Innovations for Poverty Action
IRB Approval Date
2015-12-18
IRB Approval Number
13954