Commitment or concealment? Impacts and use of a portable saving device: Evidence from a field experiment in urban India

Abstract

To quantify the impact of a novel “soft” commitment intervention, we randomly allocate 1525 Indian slum dwellers to receive a zip purse and a lockbox (treatment) or a lockbox only (control). After six months, we document a 19 percent increase in total savings in the treatment arm. The effect is sustained in a sub-sample of participants we re-interview during the COVID-19 pandemic, twenty months after initial distribution of the devices. While temptation spending was not reduced, additional analyses suggest that the zip purse served as a hiding rather than a self-control device. Our results highlight the importance of considering the role of financial transfers to other household members in future saving promotion programs.