Long term savings decisions: Financial reform, peer effects and ethnicity

Mugerman, Yevgeny; Sade, Orly; Shayo, Moses

doi:10.1016/j.jebo.2014.07.002

Cited by 44 publications

(12 citation statements)

References 40 publications

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“…Peer effects have been widely shown to affect behavior, for example, with respect to productivity at work (e.g., Falk and Ichino, 2005;Mas and Moretti, 2009;Bandiera et al, 2010), alcohol consumption (e.g., Kremer and Levy, 2008), and financial decision-making (e.g, Duflo andSaez, 2002, 2003;Bursztyn et al, 2012;Mugerman et al, 2014). Individuals can use these effects strategically to overcome self-control problems by joining self-help peer groups.…”

Section: Introductionmentioning

confidence: 99%

Saving more in groups: Field experimental evidence from Chile

Kast

Meier

Pomeranz

2018

Journal of Development Economics

174

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We test the impact of a peer group savings program on precautionary savings, through two randomized field experiments among 2,687 microcredit clients. The first experiment finds that the Peer Group Treatment, which combines public goal setting, monitoring in the group, and non-financial rewards, increases savings in a new savings account significantly. The number of deposits grows 3.7-fold, and the average savings balance almost doubles. In contrast, a more classical measure, a substantially increased interest rate, has no effect for most participants and raises the savings balance only for the very top of the distribution. A second experiment, conducted a year later, tests an alternative delivery mechanism and shows that effects of similar size can be achieved through feedback text messages, without meetings, rewards, or peer pressure.JEL classification: D03, D14, D91, O16

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Section: Introductionmentioning

confidence: 99%

Saving more in groups: Field experimental evidence from Chile

Kast

Meier

Pomeranz

2018

Journal of Development Economics

174

View full text Add to dashboard Cite

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“…is an endogenous variable. Although following Mugerman et al (2014) approach which allowed us to use a one lagged period model, we observed further that the problem of endogeneity bias was not fully resolved.…”

Section: Endogeneity Bias and Treatmentmentioning

confidence: 91%

Peer effects in R&D investment policy: Evidence from China

2020

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Using a typical linear model on a sample of listed firms in China over a period of ten years (2006-2016), this study empirically attempts proving how peer effects influence corporate research and development (R&D) investment decision. The study goes further to demonstrate that peer effects play a significant and critical role in determining corporate R&D investment policies, and by extension the more important determinant than traditional firm-specific factors. After dealing with endogeneity bias and conducting further robustness checks, the above conclusions were valid in this study. It has been theorized in contemporary research that both information and market competition are the main channels through which one can best appreciate peer effects and that firms with weak information acquisition ability and in highly uncertain or competitive environment are more likely to be affected by peer groups. We also find evidence that a firm's R&D investment status relative to its peer firms will affect its R&D investment decision. Moreover, the direction of peer effects follows the law of imitation. Thus, firms are more likely to imitate those peers who share similar characteristics. Yet, leading firms and state-owned enterprises (SOEs) are exceptionally different as their R&D decisions are sensitive to both peer-followers and non-SOEs respectively.

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“…Savers would need to evaluate asset allocation decisions across very different asset classes, while taking into account their investment horizons. Empirically, research has established that savers -and especially those who save for retirement -use very simple heuristics to choose money managers (e.g., Benartzi and Thaler, 2007), chase past returns (Ben Rephael et al, 2012), are strongly affected by their peers' choices (Mugerman et al, 2014), and in general make sub-optimal decisions with respect to their investment choices (Gennaioli and Shleifer, 2010 A third long-term savings scheme is the "Provident Fund" (PF), in which fees are AUM-based and members can easily withdraw their savings and switch to a different fund manager. Some provident funds are run by the same insurance companies managing the OLI and NLI plans, whereas others are owned by commercial investments houses or run by employers or labor unions.…”

Section: Related Literaturementioning

confidence: 99%