American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Deposit Collecting: Unbundling the Role of Frequency, Salience, and Habit Formation in Generating Savings
American Economic Review
vol. 103,
no. 3, May 2013
(pp. 387–92)
Abstract
We report on a field experiment using several methods for collecting deposits made in formal bank accounts in rural areas in Sri Lanka. We find that only frequent, face-to-face collection increases aggregate household savings. Collection involving community lock boxes increases balances at the collecting bank, but not overall household savings. Only community box collection appears to have the possibility of being financially viable. The various collection methods allow us to unbundle the role of frequency, salience and habit formation in deposit decisions. We find that frequency and salience affect the number of transactions, but not the level of savings.Citation
de Mel, Suresh, Craig McIntosh, and Christopher Woodruff. 2013. "Deposit Collecting: Unbundling the Role of Frequency, Salience, and Habit Formation in Generating Savings." American Economic Review, 103 (3): 387–92. DOI: 10.1257/aer.103.3.387Additional Materials
JEL Classification
- E21 Macroeconomics: Consumption; Saving; Wealth
- G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
- O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance