Do Opposites Detract? Intrahousehold Preference Heterogeneity and Inefficient Strategic Savings

Simone Schaner

American Economic Journal: Applied Economics, 2015, vol. 7, issue 2, 135-74

Abstract: This paper uses a field experiment to test whether intrahousehold heterogeneity in discount factors leads to inefficient strategic savings behavior. I gave married couples in rural Kenya the opportunity to open both joint and individual bank accounts at randomly assigned interest rates. I also directly elicited discount factors for all individuals in the experiment. Couples who are well matched on discount factors are less likely to use costly individual accounts and respond robustly to relative rates of return between accounts, while their poorly matched peers do not. Consequently, poorly matched couples forgo significantly more interest earnings on their savings. (JEL D13, D14, J12, O12)

JEL-codes: D13 D14 J12 O12 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/app.20130271
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Citations: View citations in EconPapers (112)

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