Experimental Design
229 cycle-rickshaw peddlers working in central Chennai were asked to visit a nearby study office every day for three weeks each. During these daily visits, individuals completed a breathalyzer test and a short survey on labor supply, earnings, and expenditure patterns of the previous day, and alcohol consumption both on the previous day and on the same day before coming to the study office. To study the impact of increased sobriety on savings behavior, we gave all subjects the opportunity to save money at the study office.
Participants were randomly assigned to various treatment groups with the following considerations. First, to create exogenous variation in sobriety, we offered a randomly-selected subsample of study participants financial incentives to visit the study office sober, while the remaining individuals were paid for coming to the study office regardless of their alcohol consumption. Second, to examine the interaction between sobriety incentives and commitment savings, a cross-randomized subset of individuals was provided with a commitment savings account, i.e. a savings account that did not allow them to withdraw their savings until the end of their participation in the study. Third, to identify self-control problems regarding alcohol, a randomly-selected subset of individuals was given the choice between incentives for sobriety and unconditional payments.
The experiment took place between April and September of 2014. 229 cycle-rickshaw peddlers working in central Chennai were asked to visit a nearby study office every day for three weeks each. During these daily visits, individuals completed a breathalyzer test and a short survey on labor supply, earnings, and expenditure patterns of the previous day, and alcohol consumption both on the previous day and on the same day before coming to the study office. To study the impact of increased sobriety on savings behavior, we gave all subjects the opportunity to save money at the study office.
Participants were randomly assigned to various treatment groups with the following considerations. First, to create exogenous variation in sobriety, we offered a randomly-selected subsample of study participants financial incentives to visit the study office sober, while the remaining individuals were paid for coming to the study office regardless of their alcohol consumption. Second, to examine the interaction between sobriety incentives and commitment savings, a cross-randomized subset of individuals was provided with a commitment savings account, i.e. a savings account that did not allow them to withdraw their savings until the end of their participation in the study. Third, to identify self-control problems regarding alcohol, a randomly-selected subset of individuals was given the choice between incentives for sobriety and unconditional payments.
(1) The Control Group was paid Rs. 90 ($1.50) per visit regardless of BAC on days 5 through 19. These participants simply continued with the payment schedule from Phase 1.
(2) The Incentive Group was given incentives to remain sober on days 5 through 19. These payments consisted of Rs. 60 ($1) for visiting the study office and an additional Rs. 60 if the individual was sober as measured by a score of zero on the breathalyzer test. Hence, the payment was Rs. 60 if they arrived at the office with a positive BAC and Rs. 120 if they arrived sober. Given the reported daily labor income of about Rs.\ 300 ($5) in the sample, individuals in the Incentive Group received relatively high-powered incentives for sobriety.
(3) The Choice Group was designed to elicit individuals' demand for sobriety incentives and simultaneously contribute to the estimation of the impact of increased sobriety. To familiarize individuals with the incentives, the Choice Group was given the same incentives as the Incentive Group in Phase 2 (days 5 to 7). Then, right before the start of Phase 3 (day 7) and Phase 4 (day 13), they were asked to choose for the subsequent six study days whether they preferred to continue receiving incentives or to receive unconditional payments ranging from Rs. 90 ($1.50) to Rs. 150 ($2.50), as described below.
For a detailed description of the experiment design, see here: https://economics.mit.edu/files/14959