Consumer Demand for Prize-Linked Savings: A Preliminary Analysis

30 Pages Posted: 11 Feb 2008 Last revised: 16 Nov 2008

Nick Maynard

D2D Fund

Jan‐Emmanuel De Neve

University of Oxford

Peter Tufano

University of Oxford - Said Business School; National Bureau of Economic Research (NBER); University of Oxford - Said Business School

Date Written: February 8, 2008

Abstract

This paper reports on a small-scale survey of the potential American demand for prize-linked savings accounts, an account that awards prizes as part of the saving product's return. In October 2006, Centra Credit Union launched a prize-linked savings pilot. As part of that initiative, we conducted a mall intercept survey of over 500 people in Clarksville, Indiana, the community where the program was launched. This preliminary data suggests that low-to-moderate income Americans may have substantial demand for prize-linked savings, with a majority of survey participants expressing an interest in opening a prize-linked savings account. As predicted by theory and international experience, interest in prize-linked savings is greatest among people who do not have regular saving habits, who have little actual savings, who play lotteries extensively, and who are optimistic about their futures.

Suggested Citation

Maynard, Nick and De Neve, Jan‐Emmanuel and Tufano, Peter, Consumer Demand for Prize-Linked Savings: A Preliminary Analysis (February 8, 2008). Harvard Business School Finance Working Paper No. 08-061. Available at SSRN: https://ssrn.com/abstract=1091522 or http://dx.doi.org/10.2139/ssrn.1091522

Nick Maynard

D2D Fund ( email )

1127 Harrison Ave
Roxbury, MA 02119
United States

Jan-Emmanuel De Neve

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Peter Tufano (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain
+44 (0) 1865 288551 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain
+44 (0) 1865 288551 (Phone)

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