Savings and prize-linked savings accounts

Kadir Atalay, Fayzan Bakhtiar, Stephen Cheung and Robert Slonim

Journal of Economic Behavior & Organization, 2014, vol. 107, issue PA, 86-106

Abstract: Many households have insufficient savings to handle moderate and routine consumption shocks. Many of these financially fragile households also have the highest lottery expenditures as a proportion of income. This combination suggests that prize-linked savings (PLS) accounts, combining security of principal with lottery-type jackpots, can increase savings among these at-risk households. Results from an online experiment show that the introduction of PLS accounts increase total savings and reduce lottery expenditures significantly, especially among individuals with the lowest levels of savings and income. The results imply that PLS accounts offer a plausible market-based solution to encourage individuals to increase savings.

Keywords: Personal finance; Savings; Lotteries; Online experiment; Individual decision making (search for similar items in EconPapers)
JEL-codes: C91 D12 D14 E21 G11 L83 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Working Paper: Savings and Prize-Linked Savings Accounts (2013)
Working Paper: Savings and Prize-Linked Savings Accounts (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:107:y:2014:i:pa:p:86-106

DOI: 10.1016/j.jebo.2014.07.015

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