|
Field
Abstract
|
Before
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.
|
After
We study the impact of a portable "soft" commitment device on the financial behavior of low-income slum dwellers in urban Pune, India. The portable device may add value to existing commitment designs by activating its binding appeal precisely at the point in time when spending decisions are made. 1650 individuals will be randomly allocated to receive either a zip purse and a lock box (treatment arm) or a lock box only (control arm). Both groups are asked 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 device on total savings amounts and temptation spending. Further, we will compare study arms with regards to their borrowing activity, expenditure levels, resilience to economic shocks, financial self-efficacy, and female empowerment. Findings from this study can enhance the current understanding of how commitment devices may help alleviate behavioral biases and temptations.
|
|
Field
Trial Start Date
|
Before
December 16, 2018
|
After
December 01, 2018
|
|
Field
Last Published
|
Before
December 21, 2018 10:25 PM
|
After
September 02, 2019 11:54 AM
|
|
Field
Intervention (Public)
|
Before
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.
|
After
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 lockbox. Keys are distributed to the participant and his/her partner residing in the same housheold. The lock box can thus be opened at any time. Money thus 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.
|
|
Field
Intervention Start Date
|
Before
January 01, 2019
|
After
March 10, 2019
|
|
Field
Intervention End Date
|
Before
February 15, 2019
|
After
April 30, 2019
|
|
Field
Primary Outcomes (Explanation)
|
Before
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
|
After
1. Total Savings:
Includes savings held in the lockbox and also savings held elsewhere (e.g., bank account, savings group, post office). Enumerators will be instructed to physically count the money stored in the lockbox.
2. Temptation Spending
We introduce a new measure of temptation spending by capturing past as well as desired future consumption of nine selected food non-food items (e.g., alcohol, tobacco, gambling,...). Temptation goods are said to differ from “essential” goods in that they provide utility when consumed, but not in anticipation of their consumption. Based on this standard definition, we classify each of the selected items only as a ‘temptation good’ if the reported amount for past expenses exceeds the desired future amount. For each respondent, these divergences will then be added up into a total amount of past-month temptation expenditures. This approach allows us to define a unique set of temptation goods for each individual respondent, without reliance on a priori, researcher-defined temptation categories.
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
|
|
Field
Experimental Design (Public)
|
Before
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.
|
After
1650 slum dwellers from the city of Pune, India, will be enrolled in the trial. 825 participants will be randomly allocated to the treatment group and 825 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.
|
|
Field
Randomization Method
|
Before
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.
|
After
Randomization to treatment and control group will be done on a 1:1 ratio, implemented in Stata, stratified by participant sex, baseline savings, and present biased time preferences.
|
|
Field
Planned Number of Observations
|
Before
1600
|
After
1650
|
|
Field
Sample size (or number of clusters) by treatment arms
|
Before
800 participants treatment, 800 participants control.
|
After
825 participants treatment, 825 participants control.
|
|
Field
Power calculation: Minimum Detectable Effect Size for Main Outcomes
|
Before
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.
|
After
For desired power of 0.80 with two-tailed p<0.007 (for seven hypothesis tests) and a minimum detectable effect size of 0.37, the target sample size for the trial is 1500 individuals. We oversampled by 10% to account for attrition.
|
|
Field
Public analysis plan
|
Before
No
|
After
Yes
|
|
Field
Secondary Outcomes (End Points)
|
Before
1. Female Empowerment
2. Self-Efficacy and Locus of Control
3. Resilience to Health Shock
4. Total debts
|
After
1. Self-Efficacy
2. Total Debt
3. Resilience to Economic Shocks Female Empowerment
4. Past-month Household Expenditures
5. Female Empowerment
|
|
Field
Secondary Outcomes (Explanation)
|
Before
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
|
After
1. Self-Efficacy
Items for the psychological concept of self-efficacy were drawn from the \emph{Internality, Powerful Others and Chance (IPC)} scale (Levenson, 1981) as well as from financial self-efficacy scales used previously in Steinert et al. (2018) and Lown (2011). Individual items will be aggregated into an index based on PCA.
2. Total Debts
In addition to total savings amounts, we will also capture outstanding debts in the past month.
3.Resilience to Emergenies:
Further to this, our survey will measure respondents’ capacity to cope with potential health or other emergencies. This will be determined based on whether participants have managed to cover the costs for potential medical treatment and medicine in the past month. We will further capture whether respondents have experienced some sort of income shock in the past six months and if so, how difficult it was for them to cope with this shock.
4. Past-month Household Expenditures
To assess the potential downstream impact of saving, we will also consider a more distal indicator of household welfare, namely past-month food and non-food expenditures.
5. Female Empowerment
Previous financial inclusion literature has routinely assessed program impacts on female empowerment. In line with this, we will measure female empowerment (for the female sample only) based on a PCA-weighted index composed of seven individual items.
|
|
Field
Pi as first author
|
Before
No
|
After
Yes
|