Moral Incentives in Credit Card Debt Repayment: Evidence from a Field Experiment

Leonardo Bursztyn, Stefano Fiorin, Daniel Gottlieb () and Martin Kanz ()

No 2018-55, HKUST IEMS Working Paper Series from HKUST Institute for Emerging Market Studies

Abstract: We study the role of morality in debt repayment, using an experiment with the credit card customers of a large Islamic bank in Indonesia. In our main treatment, clients receive a text message stating that "non-repayment of debts by someone who is able to repay is an injustice." This moral appeal decreases delinquency by 4.4 percentage points from a baseline of 66 percent, and reduces default among customers with the highest ex-ante credit risk. Additional treatments help benchmark the effects against direct financial incentives, and rule out competing explanations, such as reminder effects, priming religion, and provision of new information.

Pages: 42 pages
Date: 2018-03, Revised 2018-03
New Economics Papers: this item is included in nep-exp, nep-isf, nep-pay and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://iems.ust.hk/assets/publications/working-papers-2018/iemswp2018-55.pdf First version, 2018 (application/pdf)

Related works:
Working Paper: Moral incentives in credit card debt repayment: evidence from a field experiment (2019)
Working Paper: Moral Incentives in Credit Card Debt Repayment: Evidence from a Field Experiment (2015)
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: https://EconPapers.repec.org/RePEc:hku:wpaper:201855

Access Statistics for this paper

More papers in HKUST IEMS Working Paper Series from HKUST Institute for Emerging Market Studies Contact information at EDIRC.
Bibliographic data for series maintained by Carla Chan ( this e-mail address is bad, please contact ).