Does Saving Cause Borrowing?

Medina, Paolina C.; Pagel, Michaela

doi:10.2139/ssrn.3875123

Cited by 2 publications

(2 citation statements)

References 33 publications

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“…Lastly, the paper adds to an emerging body of empirical literature employing causal machine learning methods to study heterogeneous treatment effects on household behavior (Davis and Heller, 2020;Knittel and Stolper, 2019;Farbmacher, Kögel, and Spindler, 2021;Medina and Pagel, 2021). To the best of my knowledge, this is the first paper that uses a causal forest to explore sources of MPC heterogeneity.…”

Section: Introductionmentioning

confidence: 97%

Mental Accounting and the Marginal Propensity to Consume

Bernard

2022

SSRN Journal

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Section: Introductionmentioning

confidence: 97%

Mental Accounting and the Marginal Propensity to Consume

Bernard

2022

SSRN Journal

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“…Examples of nudges in banks include increasing savings by encouraging messaging and financial incentives (Cooper et al, 2016;Karlan et al, 2016), increasing informed decision-making when taking loans (King and Singh, 2018), reducing credit card delinquency (Bursztyn et al, 2019) and improving timely loan repayment (Karlan et al, 2015). Nudges offered by banks have also been shown to have promising results in recent working papers (Medina and Pagel, 2021;Timmons et al, 2022). That said, there is still a need for additional research to understand the mechanisms and moderators of nudging interventions in finance (Beshears et al, 2015;Heim and Huber, 2021).…”

Section: Introductionmentioning

confidence: 99%

How am I doing financially compared to expectations? An experimental comparison of messaging strategies in investor newsletters

Pulk

Uusberg

Riitsalu

2022

IJBM

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PurposeThis study aims to investigate which messaging strategies employed in personalised newsletters could be used for improving the propensity of individuals to save or invest and secure their financial well-being.Design/methodology/approachThe authors conducted a field experiment with 4,782 clients at an Estonian retail bank. For three months (after measuring baseline levels for a month), the participants received personalised monthly newsletters with either a praising or a scolding message based on comparing their recent investment decisions to their past decisions.FindingsTheir results suggest that newsletters could serve as an encouragement for those who already invest significant amounts each month and a reminder for those who have stopped regular investing for a month. The newsletters robustly increased investments in securities accounts for these groups.Research limitations/implicationsThe authors contribute to the marketing literature by examining praise and scolding messaging strategies within the same channel and company, focussing on the individual's past behaviour. They raise several hypotheses to be tested in future randomised controlled trials (RCTs).Practical implicationsThe authors’ results show the importance of investor behaviour analysis as the effectiveness of the newsletter intervention largely depended on the type of customer it was served to. This highlights the importance of personalisation.Originality/valueThe results show that a given message tends to influence only specific groups of investors. Identifying these groups is valuable information for messaging strategies.

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Does Saving Cause Borrowing?

Cited by 2 publications

References 33 publications

Mental Accounting and the Marginal Propensity to Consume

Mental Accounting and the Marginal Propensity to Consume

How am I doing financially compared to expectations? An experimental comparison of messaging strategies in investor newsletters

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