Price and Control Elasticities of Demand for Savings in the Philippines
Last registered on April 12, 2017

Pre-Trial

Trial Information
General Information
Title
Price and Control Elasticities of Demand for Savings in the Philippines
RCT ID
AEARCTR-0001788
Initial registration date
April 11, 2017
Last updated
April 12, 2017 3:12 PM EDT
Location(s)
Primary Investigator
Affiliation
Northwestern University
Other Primary Investigator(s)
PI Affiliation
Dartmouth College
Additional Trial Information
Status
Completed
Start date
2007-04-01
End date
2014-01-01
Secondary IDs
Abstract
Assumptions about individual demand for savings underlie workhorse models of intertemporal choice and intra-household bargaining, banking strategy, and financial inclusion policy. A Philippine bank tested sensitivity to interest rates and account ownership requirements in 10,000 randomized door-to-door solicitations for a commitment savings account. Take-up is substantial (23%), but price elasticity of saving in this account is not significantly different from zero in either the full sample or sub-groups of plausibly marginal savers. The upper bound is less than 0.5 in the full sample, and exceeds 1.0 in only 1 of 22 sub-groups. Nor do we find sensitivity to ownership requirements.
External Link(s)
Registration Citation
Citation
Karlan, Dean and Jonathan Zinman. 2017. "Price and Control Elasticities of Demand for Savings in the Philippines." AEA RCT Registry. April 12. https://www.socialscienceregistry.org/trials/1788/history/16460
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Experimental Details
Interventions
Intervention(s)
The researchers collaborated with a for-profit bank in the Philippines on a randomized field experiment to study the determinants of demand for a savings commitment account. After a baseline survey, 9,992 individuals were solicited to open a savings commitment account. Potential clients were randomly assigned interest rates and (conditional on being married)account ownership requirements. The researchers used an OLS specification to estimate the impacts of the two treatments on take-up and saving, controlling for neighborhood, marketer, and week-of-offer fixed effects. The researchers used the results to estimate the price and control elasticities of demand for the savings account.

Of the 9,992 individuals offered, 2,265 opened accounts. 1,523 accounts were opened by married individuals. The researchers found no statistically significant impacts of either interest rate or account ownership on take-up or average savings balance. Estimated demand elasticities suggest that demand was insensitive to both interest rate variation and account ownership requirements. Demand is strongly correlated with client characteristics and bank sales efforts, and there is no evidence of effect heterogeneity.
Intervention Start Date
2007-04-01
Intervention End Date
2008-11-24
Primary Outcomes
Primary Outcomes (end points)
Take-up; several average account balance measures; whether an individual reached their saving goal; if more than one deposit was made
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
The field experiment was carried out by door-to-door marketers who approached more than 10,000 people with solicitations for a commitment savings account. Using a PDA, marketers helped prospective clients complete a brief baseline survey, which was also used to screen out unpromising prospects. After the survey, marketers offered prospective clients the opportunity to open the commitment savings account. Clients set their own savings goal and time frame with no fixed deposit schedule. Marketers independently randomized potential clients into the different treatment arms using PDAs.

The interest rate treatment had three experimental arms with equal probability of assignment: a "normal" rate of 1.5% APY, a "high" rate of 3% APY; and a "reward" rate where the client would receive the high rate if they met their savings goal or the normal rate if they did not. The account ownership treatment had three experimental arms with equal probability of assignment, conditional on being married: individual ownership, joint ownership with spouse, and optional ownership where client could choose individual or joint ownership.
Experimental Design Details
Randomization Method
Individuals were randomized independently on personal PDAs after being surveyed
Randomization Unit
Individual
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
9,992 individuals
Sample size: planned number of observations
9,992 individuals
Sample size (or number of clusters) by treatment arms
Interest rate treatment: 3,329 assigned to the regular rate; 3,367 assigned to the high rate; 3,296 assigned to the reward rate

Account ownership treatment: 3,275 assigned to individual ownership; 3,283 assigned to joint ownership; 3,434 assigned to chose individual or joint ownership
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
IPA Institutional Review Board
IRB Approval Date
Details not available
IRB Approval Number
08June-001
IRB Name
Human Subjects Committee at Yale University
IRB Approval Date
Details not available
IRB Approval Number
0605001428
Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
Yes
Intervention Completion Date
November 24, 2008, 12:00 AM +00:00
Is data collection complete?
Yes
Data Collection Completion Date
November 24, 2008, 12:00 AM +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
9,992 individuals
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
9,992 individuals
Final Sample Size (or Number of Clusters) by Treatment Arms
Interest rate treatment: 3,329 assigned to the regular rate; 3,367 assigned to the high rate; 3,296 assigned to the reward rate Account ownership treatment: 3,275 assigned to individual ownership; 3,283 assigned to joint ownership; 3,434 assigned to chose individual or joint ownership
Reports and Papers
Preliminary Reports
Relevant Papers
Abstract
Assumptions about individual demand for savings underlie workhorse models of intertemporal choice and intra-household bargaining, banking strategy, and financial inclusion policy. A Philippine bank tested sensitivity to interest rates and account ownership requirements in 10,000 randomized door-to-door solicitations for a commitment savings account. Take-up is substantial (23%), but price elasticity of saving in this account is not significantly different from zero in either the full sample or sub-groups of plausibly marginal savers. The upper bound is less than 0.5 in the full sample, and exceeds 1.0 in only 1 of 22 sub-groups. Nor do we find sensitivity to ownership requirements.
Citation
Karlan, Dean, and Jonathan Zinman. "Price and Control of Demand for Savings." Working Paper, January 2014.