This research project examined the savings behavior of
rural self-employed. Baseline and
monthly/quarterly follow-up surveys of around 800 rural self-employed
households in Bandarawela and Mahiyangana. A point-of-service device to mobilize savings was implemented (in partnership with a national-level
savings bank) among randomly selected respondents.
RESEARCH PUBLICATIONS
Published
in American Economic Review: Papers &
Proceedings, Vol. 103, No. 3, May 2013, pp. 387-392. (downloadable from http://www.aeaweb.org/articles.php?doi=10.1257/aer.103.3
“Deposit Collecting: Unbundling the Role of
Frequency, Salience, and Habit Formation in Generating Savings”
Deposit collectors are common in many countries.
Poor households have shown their willingness to pay for such services indicating
the value of illiquid savings to those whose financial lives are transacted
largely in cash. We report on a field experiment using several
methods for collecting deposits made in formal bank accounts in rural areas in
Sri Lanka. We find that only frequent, face-to-face collection increases
aggregate household savings. Collection involving community lock boxes
increases balances at the collecting bank, but not overall household savings.
Only community box collection appears to have the possibility of being
financially viable. The various collection methods allow us to unbundle the
role of frequency, salience and habit formation in deposit decisions. We find
that frequency and salience affect the number of transactions, but not the
level of savings.