Economics at your fingertips  

Saving by Default: Evidence from a Field Experiment in Rural India

Vincent Somville and Lore Vandewalle ()

American Economic Journal: Applied Economics, 2018, vol. 10, issue 3, 39-66

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 in the account increase by 131 percent 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.

JEL-codes: C93 D14 D90 G21 O12 O16 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/app.20160547
References: Add references at CitEc
Citations: View citations in EconPapers (16) Track citations by RSS feed

Downloads: (external link) (application/pdf) ... aPYVpOdy2w8A1qVmyeq7 (application/zip) ... FxOiuHbNU73omvISJ-mv (application/pdf) ... fF8N3WfzY9hAkXU8hJyA (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Saving by Default: Evidence from a Field Experiment in Rural India (2016) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from

Access Statistics for this article

American Economic Journal: Applied Economics is currently edited by Alexandre Mas

More articles in American Economic Journal: Applied Economics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().

Page updated 2021-04-12
Handle: RePEc:aea:aejapp:v:10:y:2018:i:3:p:39-66