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Why Don't the Poor Save More? Evidence from Health Savings Experiments

Pascaline Dupas and Jonathan Robinson

Santa Cruz Department of Economics, Working Paper Series from Department of Economics, UC Santa Cruz

Abstract: Using data from a field experiment in Kenya, we document that providing individuals with simple informal savings technologies can substantially increase investment in preventative health and reduce vulnerability to health shocks. Simply providing a safe place to keep money was sufficient to increase health savings, through a mental accounting effect. Adding an earmarking feature was only helpful when funds were put towards emergencies; earmarking for preventative health reduced savings on average, because the liquidity cost of tying up money was too great. Providing social pressure and credit through a ROSCA-based savings scheme had very large effects.

Keywords: Social and Behavioral Sciences; Personal Finance; Intertemporal Consumer Choice; Life Cycle Models and Saving; Saving and Capital Investment; Financial Markets; Kenya; Informal Savings Technology; ROSCA; Preventative Health (search for similar items in EconPapers)
Date: 2012-11-15
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Related works:
Journal Article: Why Don't the Poor Save More? Evidence from Health Savings Experiments (2013) Downloads
Working Paper: Why Don't the Poor Save More? Evidence from Health Savings Experiments (2011) Downloads
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