Savings Goal Calendars as Soft Commitment Devices: Evidence from Small Business Owners in Uganda

Discussion Papers 1919, 35 S.

Antonia Grohmann, Tabea Lakemann, Helke Seitz

2020

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Abstract

This study examines the effect of a soft commitment device in the form of a savings goal calendar on savings for small business owners in Kampala, Uganda. We run a randomized controlled trial (RCT) under which the treatment group receives a calendar designed to set savings goals and to make a plan to reach this goal. The control group is given a plain calendar. We find no average effect on savings, but show that present-biased individuals save more when given the calendar. Further examinations indicate that present-biased individuals are more likely to use the calendar, suggesting that, in line with theory, present-biased individuals have a demand.



JEL-Classification: O12;D14;D22;C93
Keywords: Soft commitment, savings, time preferences, small business growth

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