Under-Savers Anonymous: Evidence on Self-Help Groups and Peer Pressure as a Savings Commitment Device
We test the effectiveness of self-help peer groups as a commitment device for precautionary savings, through two randomized field experiments among 2,687 microentrepreneurs in Chile. The first experiment finds that self-help peer groups are a powerful tool to increase savings (the number of deposits grows 3.5-fold and the average savings balance almost doubles). Conversely, a substantially higher interest rate has no effect on most participants. A second experiment tests an alternative delivery mechanism and shows that effects of a similar size can be achieved by holding people accountable through feedback text messages, without any meetings or peer pressure.
We thank Alberto Abadie, Alberto Alesina, Nageeb Ali, John Beshears, Raj Chetty, Shawn Cole, David Cutler, Pascaline Dupas, Nicola Fuchs-Schuendeln, Edward Glaeser, Jessica Goldberg, Daniel Hojman, Lakshmi Iyer, Sandy Jencks, Dean Karlan, Lawrence Katz, Michael Kremer, David Laibson, Josh Lerner, Dan Levy, Jeffrey Liebman, Stephan Litschig, Brigitte Madrian, Sendhil Mullainathan, Rohini Pande, Alvin Roth, Guy Stuart, Richard Zeckhauser and participants at various seminars and conferences for helpful comments and discussions. We are grateful to Fondo Esperanza, Banco Credichile and Microdatos for outstanding collaboration in the implementation process. This project would not have been possible without the generous support by the following institutions: the Ford Foundation, Banco Credichile, the Lab for Economic Applications and Policy (LEAP) at Harvard, the Women and Public Policy Program at the Harvard Kennedy School, the David Rockefeller Center for Latin American Studies, the Chazen Institute of International Business at Columbia Business School, the Columbia University CIBER, and the Russell Sage Foundation Small Grants Program. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.