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The Persistent Power of Behavioral Change: Long-Run Impacts of Temporary Savings Subsidies for the Poor

Simone Schaner ()

American Economic Journal: Applied Economics, 2018, vol. 10, issue 3, 67-100

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-codes: C93 D13 D14 D90 G21 I32 O12 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/app.20170453
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Working Paper: The Persistent Power of Behavioral Change: Long-Run Impacts of Temporary Savings Subsidies for the Poor (2016) Downloads
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