Savings Defaults and Payment Delays for Cash Transfers
Financial products and transfer schemes are typically designed to improve welfare by helping individuals follow through on their intertemporal plans. We implement an artefactual field experiment in Malawi to test the ability of households to manage a cash windfall by varying whether 474 households receive a payment in cash or through direct deposit into pre-established accounts at a local bank. Payments are made immediately, with one day delay, or with eight days delay. Defaulting the payments into savings accounts leads to higher net deposits into bank accounts, an effect that persists for a number of weeks afterwards. However, neither savings defaults nor payment delays affect the amount or composition of spending, suggesting that households manage cash effectively without the use of formal financial products.
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Format: | Journal Article biblioteca |
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Elsevier
2017-11
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Subjects: | SAVINGS DEFAULTS, MENTAL ACCOUNTING, TIME INCONSISTENCY, NUDGES, DIRECT DEPOSIT, TRANSFER SCHEMES, WELFARE IMPACT, CASH TRANSFERS, FINANCIAL MANAGEMENT, HOUSEHOLD SPENDING, |
Online Access: | http://hdl.handle.net/10986/29256 |
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dig-okr-10986292562023-04-03T09:46:50Z Savings Defaults and Payment Delays for Cash Transfers Field Experimental Evidence from Malawi Brune, Lasse Giné, Xavier Goldberg, Jessica Yang, Dean SAVINGS DEFAULTS MENTAL ACCOUNTING TIME INCONSISTENCY NUDGES DIRECT DEPOSIT TRANSFER SCHEMES WELFARE IMPACT CASH TRANSFERS FINANCIAL MANAGEMENT HOUSEHOLD SPENDING Financial products and transfer schemes are typically designed to improve welfare by helping individuals follow through on their intertemporal plans. We implement an artefactual field experiment in Malawi to test the ability of households to manage a cash windfall by varying whether 474 households receive a payment in cash or through direct deposit into pre-established accounts at a local bank. Payments are made immediately, with one day delay, or with eight days delay. Defaulting the payments into savings accounts leads to higher net deposits into bank accounts, an effect that persists for a number of weeks afterwards. However, neither savings defaults nor payment delays affect the amount or composition of spending, suggesting that households manage cash effectively without the use of formal financial products. 2018-01-29T21:29:35Z 2018-01-29T21:29:35Z 2017-11 Journal Article Article de journal Artículo de revista Journal of Development Economics 0304-3878 http://hdl.handle.net/10986/29256 CC BY-NC-ND 3.0 IGO World Bank http://creativecommons.org/licenses/by-nc-nd/3.0/igo application/pdf Elsevier |
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SAVINGS DEFAULTS MENTAL ACCOUNTING TIME INCONSISTENCY NUDGES DIRECT DEPOSIT TRANSFER SCHEMES WELFARE IMPACT CASH TRANSFERS FINANCIAL MANAGEMENT HOUSEHOLD SPENDING SAVINGS DEFAULTS MENTAL ACCOUNTING TIME INCONSISTENCY NUDGES DIRECT DEPOSIT TRANSFER SCHEMES WELFARE IMPACT CASH TRANSFERS FINANCIAL MANAGEMENT HOUSEHOLD SPENDING |
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SAVINGS DEFAULTS MENTAL ACCOUNTING TIME INCONSISTENCY NUDGES DIRECT DEPOSIT TRANSFER SCHEMES WELFARE IMPACT CASH TRANSFERS FINANCIAL MANAGEMENT HOUSEHOLD SPENDING SAVINGS DEFAULTS MENTAL ACCOUNTING TIME INCONSISTENCY NUDGES DIRECT DEPOSIT TRANSFER SCHEMES WELFARE IMPACT CASH TRANSFERS FINANCIAL MANAGEMENT HOUSEHOLD SPENDING Brune, Lasse Giné, Xavier Goldberg, Jessica Yang, Dean Savings Defaults and Payment Delays for Cash Transfers |
description |
Financial products and transfer schemes are typically designed to improve welfare by helping individuals follow through on their intertemporal plans. We implement an artefactual field experiment in Malawi to test the ability of households to manage a cash windfall by varying whether 474 households receive a payment in cash or through direct deposit into pre-established accounts at a local bank. Payments are made immediately, with one day delay, or with eight days delay. Defaulting the payments into savings accounts leads to higher net deposits into bank accounts, an effect that persists for a number of weeks afterwards. However, neither savings defaults nor payment delays affect the amount or composition of spending, suggesting that households manage cash effectively without the use of formal financial products. |
format |
Journal Article |
topic_facet |
SAVINGS DEFAULTS MENTAL ACCOUNTING TIME INCONSISTENCY NUDGES DIRECT DEPOSIT TRANSFER SCHEMES WELFARE IMPACT CASH TRANSFERS FINANCIAL MANAGEMENT HOUSEHOLD SPENDING |
author |
Brune, Lasse Giné, Xavier Goldberg, Jessica Yang, Dean |
author_facet |
Brune, Lasse Giné, Xavier Goldberg, Jessica Yang, Dean |
author_sort |
Brune, Lasse |
title |
Savings Defaults and Payment Delays for Cash Transfers |
title_short |
Savings Defaults and Payment Delays for Cash Transfers |
title_full |
Savings Defaults and Payment Delays for Cash Transfers |
title_fullStr |
Savings Defaults and Payment Delays for Cash Transfers |
title_full_unstemmed |
Savings Defaults and Payment Delays for Cash Transfers |
title_sort |
savings defaults and payment delays for cash transfers |
publisher |
Elsevier |
publishDate |
2017-11 |
url |
http://hdl.handle.net/10986/29256 |
work_keys_str_mv |
AT brunelasse savingsdefaultsandpaymentdelaysforcashtransfers AT ginexavier savingsdefaultsandpaymentdelaysforcashtransfers AT goldbergjessica savingsdefaultsandpaymentdelaysforcashtransfers AT yangdean savingsdefaultsandpaymentdelaysforcashtransfers AT brunelasse fieldexperimentalevidencefrommalawi AT ginexavier fieldexperimentalevidencefrommalawi AT goldbergjessica fieldexperimentalevidencefrommalawi AT yangdean fieldexperimentalevidencefrommalawi |
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1767603920208658432 |