Temporal Reframing and Participation in a Savings Program: A Field Experiment

50 Pages Posted: 10 Jan 2018 Last revised: 6 Feb 2019

See all articles by Hal Hershfield

Hal Hershfield

University of California, Los Angeles (UCLA) - Marketing Area

Stephen Shu

Cornell University

Shlomo Benartzi

University of California at Los Angeles

Date Written: February 2, 2019

Abstract

A growing percentage of American workers are now freelancers and thus responsible for their own retirement savings, yet they face a number of psychological hurdles that hamper them from saving enough money for the long-term. Although prior theory-derived interventions have been successful in addressing some of these obstacles, encouraging participation in saving programs is a challenging endeavor for policymakers and consumers alike. In a field setting, we test whether framing savings in more or less granular formats (e.g., saving daily versus monthly) can encourage continued saving behavior through increasing the take-up of a recurring deposit program. Among thousands of new users of a financial technology app, we find that framing deposits in daily amounts as opposed to monthly amounts quadruples the number of consumers who enroll. Further, framing deposits in more granular terms reduced the participation gap between lower and higher income consumers: three times as many consumers in the highest rather than lowest income bracket participated in the program when it was framed as a $150 monthly deposit, but this difference in participation was eliminated when deposits were framed as $5 per day.

Keywords: choice architecture, behavioral economics, saving, field experiment, financial technology

JEL Classification: G02

Suggested Citation

Hershfield, Hal and Shu, Stephen and Benartzi, Shlomo, Temporal Reframing and Participation in a Savings Program: A Field Experiment (February 2, 2019). Available at SSRN: https://ssrn.com/abstract=3097468 or http://dx.doi.org/10.2139/ssrn.3097468

Hal Hershfield (Contact Author)

University of California, Los Angeles (UCLA) - Marketing Area ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

Stephen Shu

Cornell University ( email )

Ithaca, NY 14853
United States

Shlomo Benartzi

University of California at Los Angeles ( email )

D410 Anderson Complex
Los Angeles, CA 90095-1481
United States
310-206-9939 (Phone)
310-267-2193 (Fax)

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
1,110
Abstract Views
7,058
Rank
36,193
PlumX Metrics