Competition as a Savings Incentive: A Field Experiment at a Homeless Shelter
34 Pages Posted: 28 Jun 2013
Date Written: October 22, 2012
This paper describes a randomized field experiment testing the impact of a savings competition on the behavior of homeless individuals staying at a transitional shelter. When monetary prizes were offered for achieving the highest saving rates within a particular month, average savings increased by $80 (a 30% increase in savings rate) while income and attendance at case management meetings remained unchanged. However, repeating the competition in the following month had no effect because responsive savers selected out of the shelter after the first month. In summary, while a savings competition can increase savings in the short run, its effect may be limited to the intensive margin and may diminish with repetition.
Keywords: Field experiment, Savings, Income, Competition, Poverty, Social services, Homelessness, Time inconsistency, Participation
JEL Classification: C93, D91, I3, J1, L3, Z18
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