Paper forthcoming in American Economic Journal: Applied Economics

13 June 2017 11:42

(updated: 13 June 2017 11:47)

Paper forthcoming in American Economic Journal: Applied Economics

“Saving by Default: Evidence from a Field Experiment in Rural India”, written by The Choice Lab researcher Vincent Somville, along with Lore Vandewalle (IHEID Geneva), is accepted for publication in American Economic Journal: Applied Economics

Lore Vandewalle’s site

For further information, follow the link to the paper at American Economic Association’s website or read the abstract below.

Forthcoming paper

Abstract:
Access to banks is rapidly increasing worldwide, and allows account-based instead of cash transfers. We conduct a randomized experiment documenting the impact of the payment method on savings behavior. In India, we allocate identical weekly payments into a bank account (treated) or in cash (control). Savings on the account increase by 131% within three months, and the effect is long lasting. We also show that cash payments increase consumption and that - once everyone is paid in cash again – the saving patterns no longer differ. We interpret these findings as a default effect, and we further discuss plausible mechanisms.

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