The impact of a “carry-around” soft commitment device on savings and temptation spending: Evidence from a field experiment in Indian slums
Last registered on December 21, 2018

Pre-Trial

Trial Information
General Information
Title
The impact of a “carry-around” soft commitment device on savings and temptation spending: Evidence from a field experiment in Indian slums
RCT ID
AEARCTR-0003682
Initial registration date
December 18, 2018
Last updated
December 21, 2018 10:25 PM EST
Location(s)

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Primary Investigator
Affiliation
University of Goettingen
Other Primary Investigator(s)
PI Affiliation
University of Goettingen
Additional Trial Information
Status
On going
Start date
2018-12-16
End date
2019-12-31
Secondary IDs
Abstract
We study the impact of a portable "soft" commitment device on the financial behavior of poor slum dwellers in urban India. A total of 1600 individuals will be randomly allocated to receive either a zip purse and a sealed money box (treatment arm) or a sealed money box only (control arm). Both groups are further encouraged to formulate a savings goal and commit to a step-by-step individualized savings plan. We will estimate the causal impact of receiving the portable savings device on total savings amounts and temptation spending. Further, we will compare study arms with regards to borrowing activity, resilience to health shocks, financial self-efficacy, and female empowerment. Findings from this study can enhance the current understanding of pertinent savings barriers by putting specific focus on behavioral biases and temptation spending. Specifically, we introduce and test an innovation to existing commitment products by distributing a portable savings device that can activate its commitment and reminder function precisely at the point in time when spending decisions are made.
External Link(s)
Registration Citation
Citation
Steinert, Janina and Sebastian Vollmer. 2018. "The impact of a “carry-around” soft commitment device on savings and temptation spending: Evidence from a field experiment in Indian slums." AEA RCT Registry. December 21. https://www.socialscienceregistry.org/trials/3682/history/39495
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Experimental Details
Interventions
Intervention(s)
Treatment:
The proposed intervention, named “Aaj bachat kara, udya khush raha” (Marathi for “Save today, be happy tomorrow”), consists of a portable savings device (zip purse) that is provided in addition to a stationary savings box. It is thereby hypothesized that the carry-around savings device fulfils both a reminder and earmarking function that may invoke feelings of guilt and failure if money is spent on temptation goods.

The stationary device is a sealed piggy bank. After opening the seal once, it is destroyed and loses its function as a physical barrier to access the savings. However, by allowing for this flexibility, money retains its liquidity and can be accessed in urgent cases or emergencies. The intervention can therefore be conceived of as a “soft nudge” rather than a “hard” and fully coercive commitment.

Savings devices are distributed to participants during home visits. In these visits, participants are also encouraged to formulate a savings goal and commit to an individualized savings plan that outlines specific steps on how to reach their savings goal.

(Active) Control:
The control group receives only the stationary and not the portable savings device. Similar to the treatment group, the device is delivered in home visits and participants are asked to formulate both a savings goal and detailed savings plan.
Intervention Start Date
2019-01-01
Intervention End Date
2019-02-15
Primary Outcomes
Primary Outcomes (end points)
1. Total Savings
2. Temptation Spending
Primary Outcomes (explanation)
1. Total Savings:
Includes savings held in stationary savings box and also savings held elsewhere (e.g., bank account, savings group, post office)
2. Temptation Spending
We use a new measure which captures past consumption and desired future consumption on 13 food items and 10 non-food items. ‘Temptation goods’ differ from normal goods in that they provide utility when consumed, but not in anticipation of their consumption. Using this definition in our survey allows us to define a unique set of temptation goods for each individual.
We further include a self-rated temptation index based on the following three items:
-In the past month, I spent money on things that I didn’t really need.
-In the past month, I bought something and later regret that I did.
-In the past month, I found it difficult to really control on how I spend my money

Secondary Outcomes
Secondary Outcomes (end points)
1. Female Empowerment
2. Self-Efficacy and Locus of Control
3. Resilience to Health Shock
4. Total debts
Secondary Outcomes (explanation)
1. Female Empowerment:
Aggregated index (using principal component analysis) based on the following individual items:
-Boys should be fed first and given more food compared to girls.
-A husband should be more educated than his wife.
-Daughters should have a similar right to inherited property as sons.
-It would be a good idea to elect a woman as the President of India again.
-Do you get in trouble for leaving the house without informing your husband or another household member? (asked to women only)
-Do you get in trouble for making unescorted outings such as visiting your parents, friends, going to the market? (asked to women only)

2. Self-Efficacy and Locus of Control:
Aggregated index (using principal component analysis) based on the following individual items:
-When I make plans, I am almost certain to make them work
-When I get what I want, it’s usually because I worked hard for it
-My life is controlled by other powerful people
-I am confident that I will not run out of money before the next payday
-I am confident that I can plan carefully in advance how to use my money during each week
Experimental Design
Experimental Design
1600 slum dwellers from the city of Pune, India, will be enrolled in the trial. 800 participants will be randomly allocated to the treatment group and 800 participants to the control group. Randomization will be stratified by participant sex, income, and present bias. Eligibility criteria are a) being 18 years and older, b) having some income (employment or other) at least once per week or on a monthly basis, and c) holding at least some decision making power over how money is spent. The study aims for a roughly equal share of female and male participants.
Experimental Design Details
Not available
Randomization Method
Randomization to treatment and control group will be done on a 1:1 ratio, implemented in Stata, stratified by participant sex, income level, and present biased time preferences.
Randomization Unit
Individual Randomization
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
NA
Sample size: planned number of observations
1600
Sample size (or number of clusters) by treatment arms
800 participants treatment, 800 participants control.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
For desired power of 0.80 with two-tailed p<0.05 and a minimum detectable effect size of 0.14, the target sample size for the trial is 1600 individuals.
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
Ethics Committee of the University of Goettingen
IRB Approval Date
2018-12-13
IRB Approval Number
EK 10.-35/2018