Household Decision Making and Savings Impacts: Further Evidence from a Commitment Savings Product in the Philippines

29 Pages Posted: 30 Jun 2006

See all articles by Nava Ashraf

Nava Ashraf

Harvard University - Business School (HBS)

Dean S. Karlan

Yale University; Northwestern University - Kellogg School of Management; Innovations for Poverty Action; Massachusetts Institute of Technology (MIT) - Abdul Latif Jameel Poverty Action Lab (J-PAL); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Wesley Yin

University of Chicago - Harris School of Public Policy; University of California, Los Angeles (UCLA) - School of Public Policy & Social Research

Date Written: June 2006

Abstract

Commitment devices for savings could benefit those with self-control as well as familial or spousal control issues. We find evidence to support both motivations. We examine the impact of a commitment savings product in the Philippines on household decision making power and self-perception of savings behavior, as well as actual savings. The product leads to more decision making power in the household for women, and likewise more purchases of female-oriented durable goods. We also find that the product leads women who appear time-inconsistent in a baseline survey to self-report being a disciplined saver in the follow-up survey. For impact on savings balances, we find that the 81% increase in savings after one year did not crowd out savings held outside of the participating bank, but that the longer-term impact over two and a half years on bank savings dissipated to only a 33% increase, which is no longer statistically significant. We discuss reasons why the effect dissipated and the implications for designing and implementing sustainable, equilibrium-shifting interventions.

Keywords: Savings, microfinance, female empowerment, household decision making, commitment

JEL Classification: D12, D63, D91, J16, O12, O16

Suggested Citation

Ashraf, Nava and Karlan, Dean S. and Karlan, Dean S. and Yin, Wesley, Household Decision Making and Savings Impacts: Further Evidence from a Commitment Savings Product in the Philippines (June 2006). Yale University Economic Growth Center Discussion Paper No. 939, Available at SSRN: https://ssrn.com/abstract=912771 or http://dx.doi.org/10.2139/ssrn.912771

Nava Ashraf

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States
617-495-5058 (Phone)
617-496-4191 (Fax)

Dean S. Karlan (Contact Author)

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Yale University ( email )

Box 208269
New Haven, CT 06520-8269
United States

Innovations for Poverty Action ( email )

1731 Connecticut Ave, 4th floor
New Haven, CT 20009
United States

Massachusetts Institute of Technology (MIT) - Abdul Latif Jameel Poverty Action Lab (J-PAL) ( email )

E60-246
77 Massachusetts Avenue
Cambridge, MA 02139
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Wesley Yin

University of Chicago - Harris School of Public Policy ( email )

1155 East 60th Street
Chicago, IL 60637
United States
773-702-8194 (Phone)
773-702-2286 (Fax)

University of California, Los Angeles (UCLA) - School of Public Policy & Social Research ( email )

Box 951656
Los Angeles, CA 90095
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
520
Abstract Views
3,479
rank
74,382
PlumX Metrics