The impact of commitment savings on seasonal poverty dynamics in northern Bangladesh

Last registered on September 16, 2021
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Pre-Trial

Trial Information

General Information

Title
The impact of commitment savings on seasonal poverty dynamics in northern Bangladesh
RCT ID
AEARCTR-0007862
Initial registration date
June 22, 2021

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
June 23, 2021, 8:34 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
September 16, 2021, 11:14 PM EDT

Last updated is the most recent time when changes to the trial's registration were published.

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Primary Investigator

Name
Kazushi Takahashi
Affiliation
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Other Primary Investigator(s)

PI Name
Abu Shonchoy
PI Affiliation
Florida International University
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Additional Trial Information

Status
On going
Start date
2019-04-01
End date
2023-09-30
Keywords
Finance & Microfinance, Welfare
Additional Keywords
seasonality, consumption smoothing, poverty traps
JEL code(s)
G21, I32, O16, P46
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
It is widely discussed that the rural poor suffer seasonal starvation during the agricultural lean period. Unlike unanticipated shocks such as natural hazard and economic crisis, this seasonality appears to be anticipatable, hence would be manageable. To investigate whether time-locked commitment savings schemes can prevent the seasonal fall in consumption, we implement a randomized controlled trial to offer households commitment-savings products, either with market (8% per annum) or premium (50%) interest rates. We target 180 households with limited access to agricultural land that comprise the poorest segment in the Greater Rangpur region of northern Bangladesh. We pay particular attention to well-documented seasonal deprivation in the agricultural lean period from the mid-September to the end of October, locally known as Monga; households can receive the pre-specified interest if they can save money in the experimental account until Monga. To trace the impact of the commitment-saving product, we conduct bi-weekly surveys 18 times a year from April to January for two years, 2018/2019 and 2019/2020, where the first and second year correspond to pre- and post-intervention period, respectively.
External Link(s)

Registration Citation

Citation
Shonchoy, Abu and Kazushi Takahashi. 2021. "The impact of commitment savings on seasonal poverty dynamics in northern Bangladesh." AEA RCT Registry. September 16. https://doi.org/10.1257/rct.7862
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
We introduce a savings scheme in June 2019 in collaboration with a local NGO, Gaibandha Rural Development Foundation (GRDF). This savings scheme involves a commitment device, in that the households are allowed to withdraw money at any time, but interest is not paid if they break the commitment to save until the beginning of the Monga period, that is, mid-September.

Intervention Start Date
2020-06-01
Intervention End Date
2020-09-30

Primary Outcomes

Primary Outcomes (end points)
1. Per capita total household expenditure
2. Per capita food expenditure
3. Per capita non-food expenditure
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
1. Food calorie intake per capita
2. Household dietary diversity score
Secondary Outcomes (explanation)
Household dietary diversity score measures the number of different food items or groups, out of 12, consumed by a household over the reference period. Although the reference period commonly considered in the literature is 24 hours prior to the interview, we extend this to seven days to fit our survey frequency.

Experimental Design

Experimental Design
Out of the 180 sample households, 72 randomly selected households are eligible to receive the premium interest rate of 50% (Treatment 1: T1), while 54 households are eligible to receive the market interest rate, i.e., approximately 8% per annum (Treatment 2: T2). The remaining 54 households serve as the control group (Control: C).

Both savings schemes provide a free account with no opening, maintenance and withdrawal fees. In execution, the stuff of GRDF visit eligible households individually to collect savings twice a month independently from the household survey team, organized by MOMODa Foundation.

We differentiate the interest rate to examine whether access to savings schemes alone is sufficient or whether additional incentives are required for people to save for the anticipated seasonal deprivation shocks during Monga. The maximum saving amount is set at 4,000 BDT, which is about a half of the monthly household expenditure.
Experimental Design Details
Not available
Randomization Method
Randomization done in office by a computer.
Randomization Unit
Household
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
6 villages
Sample size: planned number of observations
180 households
Sample size (or number of clusters) by treatment arms
72 households in T1, 54 households in T2, and 54 households in control
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Sophia University
IRB Approval Date
2017-09-26
IRB Approval Number
2017-59
Analysis Plan