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Field
Abstract
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Before
What is the consumption, debt and balance sheet response to increased savings? The budget constraint requires that every dollar saved should decrease consumption (or increase debt). Do individuals cut on groceries or human capital investments in response to increased savings? Do minimum savings requirements such as IRAs decrease liquidity and induce expensive borrowing through credit cards? This project revisits such foundational questions on the consumption/savings interplay in the retirement savings context. We propose a research design that would allow to answer these questions directly via a field experiment in Turkey. Through a large local financial institution, I randomly nudge a few thousand individuals via a phone solicitation to increase their savings through a retirement savings account, and track their consumption, debt and balance sheet responses.
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After
What is the consumption, debt and balance sheet response to increased savings? The budget constraint requires that every dollar saved should decrease consumption (or increase debt). Do individuals cut on groceries or human capital investments in response to increased savings? Do minimum savings requirements such as IRAs decrease liquidity and induce expensive borrowing through credit cards? This project revisits such foundational questions on the consumption/savings interplay in the retirement savings context. We propose a research design that would allow to answer these questions directly via a field experiment in Turkey. Through a large local financial institution, we randomly nudge a few thousand individuals via a phone solicitation to increase their savings through a retirement savings account, and track their consumption, debt and balance sheet responses.
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Field
Last Published
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Before
March 24, 2015 08:50 PM
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After
March 24, 2015 08:56 PM
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Field
Experimental Design (Public)
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Before
The financial institution serves 400,000 IRA contracts. About 10,000-15,000 of these contracts are nudged via a phone call to increase their savings by the company. About 10,000-15,000 of these contracts are nudged via a phone call to increase their savings by the company. Experiment participants are chosen to be the sole owner/payer of their IRA contracts. We then oversample three groups of customers: 1) those that have wage information 2) those that participate in an ongoing parallel credit card experiment 3) those that do not have a credit card from another bank. Finally, we exclude 3000 individuals from the individuals to be called.
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After
We work with a financial institution that serves 400,000 IRA contracts. About 10,000-15,000 of these contracts are nudged via a phone call to increase their savings by the company. About 10,000-15,000 of these contracts are nudged via a phone call to increase their savings by the company. Experiment participants are chosen to be the sole owner/payer of their IRA contracts. We then oversample three groups of customers: 1) those that have wage information 2) those that participate in an ongoing parallel credit card experiment 3) those that do not have a credit card from another bank. Finally, we exclude 3000 individuals from the individuals to be called.
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