Subgroup Analysis of Investment Constraints: Evidence from Ugandan Microenterprises

Discussion Papers 1920, 48 S.

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: D22;D25;O12;O16
Keywords: Entrepreneurship, investment, credit constraints, savings constraints, managerial constraints