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Commitments to Save: A Field Experiment in Rural Malawi

55 Pages Posted: 20 Apr 2016  

Lasse Brune

affiliation not provided to SSRN

Xavier Giné

World Bank - Development Research Group (DECRG)

Jessica Goldberg

University of Maryland, Department of Economics

Dean Yang

University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy; National Bureau of Economic Research (NBER); University of Michigan at Ann Arbor - Department of Economics

Date Written: August 1, 2011

Abstract

This paper reports the results of a field experiment that randomly assigned smallholder cash crop farmers formal savings accounts. In collaboration with a microfinance institution in Malawi, the authors tested two primary treatments, offering either: 1) "ordinary" accounts, or 2) both ordinary and "commitment" accounts. Commitment accounts allowed customers to restrict access to their own funds until a future date of their choosing. A control group was not offered any account but was tracked alongside the treatment groups. Only the commitment treatment had statistically significant effects on subsequent outcomes. The effects were positive and large on deposits and withdrawals immediately prior to the next planting season, agricultural input use in that planting, crop sales from the subsequent harvest, and household expenditures in the period after harvest. Across the set of key outcomes, the commitment savings treatment had larger effects than the ordinary savings treatment. Additional evidence suggests that the positive impacts of commitment derive from keeping funds from being shared with one's social network.

Keywords: Economic Theory & Research, Emerging Markets, Banks & Banking Reform, Debt Markets, Rural Poverty Reduction

Suggested Citation

Brune, Lasse and Giné, Xavier and Goldberg, Jessica and Yang, Dean, Commitments to Save: A Field Experiment in Rural Malawi (August 1, 2011). World Bank Policy Research Working Paper No. 5748. Available at SSRN: https://ssrn.com/abstract=1904244

Lasse Brune (Contact Author)

affiliation not provided to SSRN ( email )

Xavier Gine

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

HOME PAGE: https://sites.google.com/site/decrgxaviergine/

Jessica Goldberg

University of Maryland, Department of Economics ( email )

College Park, MD 20742
United States

Dean Yang

University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy ( email )

440 Lorch Hall
611 Tappan Street
Ann Arbor, MI 48109
United States
734-764-6158 (Phone)

HOME PAGE: http://www.umich.edu/~deanyang/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Michigan at Ann Arbor - Department of Economics

611 Tappan Street
Ann Arbor, MI 48109-1220
United States

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