Nudging to Save: An Online Experiment on Savings Behaviour

Last registered on June 29, 2022
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Pre-Trial

Trial Information

General Information

Title
Nudging to Save: An Online Experiment on Savings Behaviour
RCT ID
AEARCTR-0009666
Initial registration date
June 28, 2022

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 29, 2022, 1:54 PM EDT

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

Locations

Country
Latvia
Region

Primary Investigator

Name
Andris Saulitis
Affiliation
University of Latvia
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Other Primary Investigator(s)

PI Name
Lea Kroeger
PI Affiliation
Wissenschaftszentrum Berlin für Sozialforschung
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Additional Trial Information

Status
In development
Start date
2022-06-27
End date
2022-07-04
Keywords
Finance & Microfinance
Additional Keywords
savings behavior, prize-linked savings account, social norms;
JEL code(s)
D14; G41; G51;
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
This experimental study will provide causal evidence on the potential of nudges and financial incentives to effectively address present-bias preferences and lack of self-control that decrease savings and lead to immediate consumption and excessive borrowing.
External Link(s)

Registration Citation

Citation
Kroeger, Lea and Andris Saulitis. 2022. "Nudging to Save: An Online Experiment on Savings Behaviour ." AEA RCT Registry. June 29. https://doi.org/10.1257/rct.9666-1.0
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Experimental Details

Interventions

Intervention(s)
This study will offer a payment for taking part in the survey equivalent to €10. The payment for taking part in a survey such as this is usually transferred to the respondent’s account immediately after finishing the survey. This study will offer a choice to deposit all or part of the money in virtual savings account for six months to increase the payoff to a maximum of €12.
Intervention (Hidden)
There will be three experimental groups: (1) baseline offer; (2) social norm treatment; (3) prize-linked savings account treatment

Baseline offer:
• You will earn €10 for taking part in this survey. We will transfer the earned sum to your account right after the survey. At the same time, You can deposit all or part of your earned sum in virtual savings account for six months. That gives you an option to increase your total earnings by up to €12. What would you like to do?
– I want to have €10 in my account immediately after filling out this survey
– I want to have part of my earnings immediately, but part of it deposited in the virtual savings account to receive more after six months (you will decide how much of your earnings you want to receive immediately/later in the next step)
– I want to deposit all of €10 in a virtual savings account and, after six months, receive €12 in total.

Social norm treatment:

Before starting a survey, respondents are provided with the information that the survey is devoted to the study of household financial behaviour and that in a previous survey, it was found that the majority of Latvians/Estonians do save.

Prize-linked savings account treatment

• You will earn €10 for taking part in this survey. We will transfer the earned sum to your account right after the survey. At the same time, You can deposit all or part of your earned sum in virtual savings account for six months. That gives you an option to increase your total earnings by up to €12. Moreover, if you decide to allocate all your earnings from filling out this this survey to the virtual savings account, you will participate in a lottery with a chance to win an additional €5 (the maximum number of participants in the lottery is 75 individuals). What would you like to do?
– I want to have €10 in my account immediately after filling out this survey
– I want to have part of my earnings immediately, but part of it deposited in the virtual savings account to receive more after six months (you will decide how much of your earnings you want to receive immediately/later in the next step)
– I want to take part in the lottery with a chance to win an additional €5 by depositing all of €10 in a virtual savings account and, after six months, receive €12 in total

For individuals who decide to allocate part of their earnings to a savings account, the next question will ask what part of the money (€1-€9) they are willing to allocate and the total payoff in each given choice.
Intervention Start Date
2022-06-27
Intervention End Date
2022-07-04

Primary Outcomes

Primary Outcomes (end points)
The variable of interest is the amount of earnings invested in the savings account (€0-€10). We will use OLS linear regression to estimate the causal effect of treatments on savings behaviour. The reference group will be the baseline offer.

We will use additional explanatory variables in the second model to gather more precise coefficients. These include socio-demographics and questions on savings behaviour from the current survey and the one carried out with the respondents in Fall 2021. We will use robust standard errors clustered at the country level. We will consider the treatment effect as a statistically significant effect with p<0.05 threshold.

We will examine two hypotheses:
• Social norm nudges lead to saving more
• PLS account is the most effective way to increase savings
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
In addition to the primary analysis, we will examine the country differences. We predict that the level of savings observed in this experiment will be higher in Estonia, as savings behaviour, in general, is more common in Estonia than in Latvia. We also expect that Estonians are more likely going to opt for a PLS account than Latvians, as financial incentives for increasing savings are effective among risky-behaviour individuals. The results from the survey of Fall 2021 show that Estonians are more willing to invest their earnings and prizes in investments and stocks, therefore showing a higher risk preference than Latvians.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The goal of this experimental study is to investigate the savings behaviour of individuals and potential ways to increase savings levels. The experiment uses a natural setting where individuals are being paid by a professional survey company. Individuals are asked to choose between immediate and delayed consumption of the money earned from taking part in a study. The treatments introduce a prize-linked savings account option and a nudge based on social norms.
Experimental Design Details
Randomization Method
Randomization is done by the survey company. Randomization is carried out in blocks by gender, age, country and region.
Randomization Unit
Randomization is done at the individual level
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
450 individuals who have taken part in the survey (non-experimental) carried out in Fall 2021
Sample size: planned number of observations
450 individuals
Sample size (or number of clusters) by treatment arms
150 respondents in each experimental group: 75 from each country included in the study (Latvia & Estonia)
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials