How declaring savings commitments can affect saving outcomes

The experiment explored how the ways in which individuals declared their savings commitments affected saving outcomes. In the private labeling treatment, individuals labeled their “mental savings” account and privately stated their individual savings goals (e.g., saving for a new home, computer, bicycle, etc.). In the public-labeling treatment, individuals labeled and stated individual savings goals, and shared their goals with all the members of the group receiving the same treatment. The control group was not subject to a commitment obligation.

Impact:

In the public labeling treatment group, savings increased by an average of 35 percentage points compared to the control group. Saving goals were 8.5% more likely to be reached when participants publicly opened a savings account and revealed their chosen goals in comparison to those in the control group. The private labeling treatment group gave rise to heterogenous responses, but saved 17% more compared to the treatment group

Source:

Salas, L. “Public vs. Private Mental Accounts: Experimental Evidence from Savings Groups in Colombia”, 2015.