Consumer Demand for Prize-Linked Savings: A Preliminary Analysis

Peter Tufano (), Nick Maynard () and Jan-Emmanuel De Neve
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Peter Tufano: Harvard Business School, Finance Unit
Nick Maynard: D2D Fund

No 08-061, Harvard Business School Working Papers from Harvard Business School

Abstract: This paper reports on a small-scale survey of the potential American demand for prize-linked savings accounts, an account that awards prizes as part of the saving product’s return. In October 2006, Centra Credit Union launched a prize-linked savings pilot. As part of that initiative, we conducted a mall intercept survey of over 500 people in Clarksville, Indiana, the community where the program was launched. This preliminary data suggests that low-to-moderate income Americans may have substantial demand for prize-linked savings, with a majority of survey participants expressing an interest in opening a prize-linked savings account. As predicted by theory and international experience, interest in prize-linked savings is greatest among people who do not have regular saving habits, who have little actual savings, who play lotteries extensively, and who are optimistic about their futures.

Pages: 30 pages
Date: 2008-02
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Citations: View citations in EconPapers (2)

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