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Repayment Contracts, and Savings Constraints
Last registered on November 04, 2017
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Pre-Trial

Trial Information
General Information
Title
Repayment Contracts, and Savings Constraints
RCT ID
AEARCTR-0002309
Initial registration date
November 03, 2017
Last updated
November 04, 2017 10:24 AM EDT
Location(s)
Country
Malawi
Region
Primary Investigator
Name
Eilin Francis
Affiliation
University of California, Santa Cruz
Contact Primary Investigator
Other Primary Investigator(s)
Additional Trial Information
Status
Completed
Start date
2017-07-01
End date
2017-09-30
Keywords
Environment & Energy, Finance & Microfinance, Welfare
Additional Keywords
JEL code(s)
Secondary IDs
Abstract
This work provides evidence that individuals may prefer commitment contracts to finance purchase of lumpy investments, even when a more flexible contract is available. Micro-entrepreneurs in Malawi are offered the option to purchase solar lights on two types of payments plans- either weekly installments, or a deferred lump sum payment. I measure revealed preference for these plans at differing prices, and when access to a savings technology is provided.
External Link(s)
Registration Citation
Citation
Francis, Eilin. 2017. "Repayment Contracts, and Savings Constraints." AEA RCT Registry. November 04. https://doi.org/10.1257/rct.2309-1.0.
Former Citation
Francis, Eilin. 2017. "Repayment Contracts, and Savings Constraints." AEA RCT Registry. November 04. http://www.socialscienceregistry.org/trials/2309/history/22883.
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Experimental Details
Interventions
Intervention(s)
Micro-entrepreneurs are offered the option to purchase solar-powered devices that can be used as a light source and to charge their mobile phones. Some participants were randomly assigned to a deferred payment plan, and could begin using the light without having to make any payment for it at the time of purchase. Others are offered the lamp for purchase with payment due at the time of purchase.

Half of those who qualified for the deferred payment plan received a savings technology (lock box) to save for the solar lamp. A willingness-to-pay (WTP) exercise is administered to everyone in the deferred payment group. Importantly, the test was administered after the lock box was made available to the respondents to randomly selected respondents. The WTP exercise measures demand to pay for the lamp in installments, or as a lump sum.

Cross-cut with the lockbox intervention, respondents were randomly assigned to pay for the solar lamp either in weekly installments or in one lump sum payment. Respondents are told of their repayment plan after completing the WTP exercise.
Intervention Start Date
2017-07-01
Intervention End Date
2017-09-30
Primary Outcomes
Primary Outcomes (end points)
Demand for installments plan, demand for installments plan with savings technology, purchase of solar lamp, completing payment for solar lamp, impact of solar lamp on individual, business and household outcomes.
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
The study population is divided into four groups. One group does not receive the offer to purchase the lamp and constitutes the pure control group. Of those offered the solar lamp for purchase, one group has to pay for it at the time of purchase. This group constitutes the "Cash payment" group. The others are offered the lamp for purchase on deferred payment plans. Individuals who receive the purchase offer with deferred payment receive two cross-cutting treatments. The first treatment determines access to a savings technology, and the second treatment determines frequency of repayment.
Experimental Design Details
Randomization Method
Computer randomization
Randomization Unit
Individual
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
500 individuals
Sample size: planned number of observations
500 individuals
Sample size (or number of clusters) by treatment arms
100 control, 100 cash payment, 150 no-box & deferred payment, 150 box& deferred payment
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
National Commission for Science and Technology
IRB Approval Date
2017-07-13
IRB Approval Number
Details not available
IRB Name
University of California, Santa Cruz
IRB Approval Date
2017-07-07
IRB Approval Number
HS2913
Analysis Plan
Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
No
Is data collection complete?
Data Publication
Data Publication
Is public data available?
No
Program Files
Program Files
Reports, Papers & Other Materials
Relevant Paper(s)
REPORTS & OTHER MATERIALS