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Contribution Details

Type Working Paper
Scope Discipline-based scholarship
Title Under-savers anonymous: evidence on self-help groups and peer pressure as a savings commitment device
Organization Unit
  • Felipe Kast
  • Dina Pomeranz
  • Stephan Meier
  • English
Institution National Bureau of Economic Research
Series Name NBER working paper series
Number 18417
Number of Pages 46
Date 2012
Abstract Text We test the effectiveness of self-help peer groups as a commitment device for precautionary savings, through two randomized field experiments among 2,687 microentrepreneurs in Chile. The first experiment finds that self-help peer groups are a powerful tool to increase savings (the number of deposits grows 3.5-fold and the average savings balance almost doubles). Conversely, a substantially higher interest rate has no effect on most participants. A second experiment tests an alternative delivery mechanism and shows that effects of a similar size can be achieved by holding people accountable through feedback text messages, without any meetings or peer pressure.
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