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Cash in hand and savings decisions

Spantig, Lisa (2021) 'Cash in hand and savings decisions.' Journal of Economic Behavior and Organization, 188. 1206 - 1220. ISSN 0167-2681

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Abstract

Cash is an important means of transaction, generally assumed to be fungible. However, behavioral economics and consumer research show that ‘cash in hand’, physically holding on to cash and then handing it away, affects purchasing decisions. I study how cash in hand influences decisions in a different, but very important domain: savings. Savings accounts are a promising tool for reducing poverty, but the use of savings accounts is often puzzlingly low. Holding on to cash that needs to be physically deposited into a savings account may increase the psychological costs of saving. This study experimentally identifies the causal effect of cash in hand on savings deposits of female microfinance clients in the Philippines. In contrast to many laboratory and several field studies with similar interventions, I do not find reduced savings deposits due to cash in hand.

Item Type: Article
Uncontrolled Keywords: Cash, Savings, Field experiment, Individual choice
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Elements
Date Deposited: 03 Aug 2021 14:23
Last Modified: 03 Aug 2021 15:15
URI: http://repository.essex.ac.uk/id/eprint/30804

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