What Might We Forget? An Experiment in South Africa Shows that Reminders May Increase Attention and Decrease Savings, But a Lottery May Counteract These Effects
34 Pages Posted: 1 Jul 2024
Abstract
Using administrative data on the savings behaviour of 41,672 South Africans at the onset of COVID, this experimental study demonstrates how reminders can decrease savings in a crisis. Building on an attention-based model for the effect of reminders, it shows how if individuals have forgotten prior savings, a savings reminder can increase dis-saving when received at a time when those savings may be needed. The study also suggests that enhancing a savings reminder with a lottery incentive for 4 months will undo the negative effects of a savings reminder on savings during a crisis.
Keywords: Reminder, South Africa, BANKING, Savings, Lottery, behavioral finance, Experimental Study
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