Topic: Evidence on self-help groups and peer pressure as savings commitment device
Friday, November 5, 2010 at 1:30PM-3:00PM
UCLA Anderson Cornell Hall D307
Peer groups are often used as a commitment device to achieve personal goals, but there is little empirical evidence evaluating their effectiveness and analyzing what aspects lead to their success. In collaboration with a large commercial bank and a microfinance institution, we conducted two randomized field experiments among low-income micro-entrepreneurs in Chile, to test the effect of peer groups and increases in the interest rate on savings. We find that self-help peer groups increase the number of deposits in a formal savings account 3.5-fold, and almost double the average savings balance.
|Link to paper (if available): Click here|