Use public commitments to encourage saving

Form peer groups in which individuals publicly set and declare their savings goals to their peers, and whereby progress to achieve that goal is monitored periodically by the group. This is especially relevant to the Lebanese context as group social observance of behaviors is a governing force behind decision making. More so, this holds in rural areas where more tightly-knit communities can monitor behaviors more effectively and influence behaviors.

Behavioral Tools: Social Norms, Feedback

Benchmarked Intervention

Experiment Overview

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

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