Commitment or concealment? Impacts and use of a portable saving device: Evidence from a field experiment in urban India

Abstract

We study the impact of a portable "soft" commitment device on the financial behavior of low-income slum dwellers in Maharashtra, India. 1525 individuals were randomly allocated to receiving either a zip purse and a lockbox (treatment arm) or a lockbox only (control arm). Based on self-reported measures and hand counts of money held in the distributed saving devices, we document an 81% increase in total savings in the treatment group. We do not find significant reductions in temptation spending, thus suggesting that increases in savings were not primarily realized through improvements in self-control. Instead, we suggest that reduced sharing obligations are driving the effect. In additional analyses, we document a 35% decrease in past-month transferst of cash to other household members. Hence, our findings suggest that saving can be more effectively promoted by alleviating access-related rather than behavior-related constraints and by giving women access to a saving device of their own.

‘We don’t get money in our own hands’: evidence from focus group discussions on economic abuse against women in two states of India

“…The detailed discussion guides are publicly available on the Open Science Framework website: https://osf.io/jf95y/ . 39 …”

Impact of Linkage to Financial Institutions among the Unbanked Rural People in Bangladesh: Evidence from Randomized Controlled Trial

“…Depending on an experimental study among the smallholder farmers in Ethiopia, Avdeenko et al (2019) find that money box, along with regular saving goals, led to strong increase in savings by 36 percent. Steinert et al (2022) examine the impact of zip purse along with lockbox for the treatment group and lockbox only for the control group among the slum dwellers in India resulting 19 percent savings accumulation among the treatment groups.…”

Unlocking rural resilience: Exploring innovative digital saving solutions for farming households in Mali

“…The literature on saving interventions is expanding, with experimental approaches being used to assess saving determinants. Steinert et al (2022) conducted a randomised controlled trial in India to measure the impact of a soft commitment mechanism. They distributed a zip purse and a lockbox to the treatment group and only a lockbox to the control group among Indian informal settlers.…”

“…For instance, Aggarwal et al (2023) and Dupas and Robinson (2013b) examined the impact of earmarking savings for specific purposes and providing multiple labelled saving accounts on saving performance. Steinert et al (2022) evaluated the effectiveness of a simple commitment tool, while Beaman et al (2014) investigated group-saving approaches.…”

“…The group-saving attribute leverages peer pressure to potentially enhance self-control by allowing others to view the individual's savings account (Beaman et al, 2014). The key question is whether prospective savers value the opportunity to digitise group savings or prefer to save individually, potentially concealing their savings from others (Steinert et al, 2022). The final attribute, referred to as the compartmentalisation option, aims to improve cash management by enabling the division of the saving amount into smaller subamounts (Aggarwal et al, 2023).…”