Progress 01/01/09 to 09/30/14
Outputs
Target Audience: Four field-experimental interventions test the effectiveness of modifications in a federally-funded savings program to its completion and savings rates. Our research site for the first, so-called lottery intervention reflects the characteristics of Hispanic families in Los Angeles (N=87). Savers are on average in their late thirties, the majority are Hispanic, about half is working full-time, female and many of had engaged in postsecondary education. On average, most two-parent households include at least one child. The average household income of $20,680 (control) and $16,911 (treatment) is at or below the federal poverty guidelines, which is $19,090 for a family of three at the time of data collection. At our research site for the second, "match-increase" intervention, the saver demographics reflect the characteristics of low-income families in Oregon (N=193). Savers were in their late thirties, the majority white, full-time and part-time working women, many of whom had engaged in post-secondary education. On average, at least one child was in every household, but many were single-adult headed families. At our two research sites for the frequency-of-deposit intervention (N=110), the savers were in their mid-thirties, the majority African-American, full-time working women, many of whom had engaged in post-secondary education. On average, at least one child was in every household, but many were single-adult headed. The average household income was in the low $20,000s. At our four research sites for the accountability intervention (N=499), saver demographics were similar to typical IDA programs and our two "increasing frequency" research sites. Savers were in their mid-thirties, the majority African-American, full-time working women, many of whom had engaged in post-secondary education. On average, at least one child was in every household, but many were single-adult headed. The average household income was in the low $20,000s. Changes/Problems: No major changes or problems to report. What opportunities for training and professional development has the project provided? Training and professional development opportunities have not been provided because the past year has focused on data management and analysis. Once published, we will devise these opportunities for case managers and program administrators. How have the results been disseminated to communities of interest? Results have not been disseminated to non-profit agencies, researchers and policy makers because we are currently analyzing the complete set of data collected in this research project. We plan to share project findings in research and technical reports and presentation in spring and summer of 2015. What do you plan to do during the next reporting period to accomplish the goals?
Nothing Reported
Impacts
What was accomplished under these goals?
In a series of field experiments we test whether saving and retention rates in a federally funded, matched savings program for low-income families - the Individual Development Account (IDA) program - can be improved through the introduction of program features inspired by behavioral economics. Data collection for the experiments was completed on February 28, 2013. This report presents the major results for the first time. It provides an overview of our main findings as we now start to develop comprehensive manuscripts for each of the experiments and their results. We will continue sharing our findings over the upcoming months as we delve deeper into data analysis. The experiments test the impact of: a) an increase in the frequency with which deposits are made, b) an increase in the accountability associated with deposits, and c) the introduction of lottery-based savings matches at the time of each deposit. We report evidence from 907 study participants at eight IDA agencies across the U.S. who agreed to randomly assign participants to different experimental conditions. We have several interesting, highly relevant results: 1. Savers in the lottery condition are more likely to deposit regularly, even accounting for their bi-monthly deposit deadline. This finding supports the motivating nature of the lottery intervention. 2. The experiment that tests the frequency of savings deposits documents impressively the importance of timing of behavioral economics interventions. The intervention was most effective during the difficult 14-month stretch in the middle of program participation. 3. Placing reminder and accountability calls at deposit deadline showed its success in motivating savers to make a deposit at all. 4. Regarding the increasing-match experiment, savers in the reminder-call-plus-match-increase group saved less and made fewer savings deposits than savers in the reminder-call-only group. Reasons for this unexpected, counterproductive result may be in the promise of a higher match rate appearing unrealistic or too far in the future. 5. Overall, we find that savers conform only slowly to the deposit schedule of the savings program. As a result, differences in the savings outcomes of treatment and control group participants are most salient when comparing data over multiple years, from program entry to exit.
Publications
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Progress 01/01/13 to 09/30/13
Outputs
Target Audience: Four field-experimental interventions test the effectiveness of modifications in a federally-funded savings program to its completion and savings rates. Our research site for the lottery intervention reflects the characteristics of Hispanic families in Los Angeles (N=79). Savers are in their early forties, the majority are Hispanic, full-time and part-time working women and many of had engaged in post-secondary education. On average, most two-parent households include at least one child. The average household income of $15,000 is below the federal poverty guidelines, which is $19,090 for a family of three. At our research site for the match-increase intervention, the saver demographics reflect the characteristics of low-income families in Oregon (N=190). Savers were in their late thirties, the majority white or Hispanic, full-time and part-time working women, many of whom had engaged in post-secondary education. On average, at least one child was in every household, but many were single-adult headed families. At our two research sites for the frequency-of-deposit intervention (N=108), the savers were in their mid-thirties, the majority African-American, full-time working women, many of whom had engaged in post-secondary education. On average, at least one child was in every household, but many were single-adult headed. The average household income was in the low $20,000s. At our four research sites for the accountability intervention (N=521), the saver demographics were similar to typical IDA programs and our two “increasing frequency” research sites. Savers were in their mid-thirties, the majority African-American, full-time working women, many of whom had engaged in post-secondary education. On average, at least one child was in every household, but many were single-adult headed. The average household income was in the low $20,000s. Changes/Problems: No major changes or problems to report. This project addresses the predictors of saving in the lives of low-income families in several novel and significant ways. First, this research presents the first controlled, systematic study of how savings program characteristics affect outcomes for low-income savers. Our approach to collecting data over multiple years, from the date when people entered the savings program until its completion, provides us with an understanding of how savings behavior develops over time and how it responds to our interventions. As a result, our data provide robust predictions of long-term savings behavior, as compared to shorter-term studies that use similar features in the savings context (e.g., Kast, Meier, and Pomeranz 2011). Second, it helps us better assess the strategy of using decision biases or vices that normal undermine decision quality to, instead, improve it (Ashraf, Karlan, and Yin 2005; Choi, Laibson, and Madrian 2004; Thaler and Benartzi 2004). The twice-monthly deposit feature tests the use of people’s tendencies to underweight small dollar amounts as a tactic to increase savings. Similarly, the lottery interventions utilizes the tendency to underweight small probabilities. The reminder and accountability calls shed light on the importance of accountability as a psychological process that facilitates savings. Further, the design of these three experiments allows us to parse out the relative contribution of each psychological mechanism. Finally, it is the first research to develop best practice recommendations for managing and designing IDA programs based on concepts of behavioral economics. Field experimentation is critical here, not only to ensure that an intervention is effective but also to safeguard against unintended consequences before results are implemented on a wider scale. What opportunities for training and professional development has the project provided? Training and professional development opportunities have not been provided because the past year has focuses on data collection and analysis. The data will allow us to offer these opportunities during the last project year (2013/2014). How have the results been disseminated to communities of interest? Results have not been disseminated to non-profit agencies, researchers and policy makers because we are currently analyzing the complete set of data collected in this research project. We plan to share project findings in research and technical reports and presentation in spring and summer of 2014. What do you plan to do during the next reporting period to accomplish the goals? The upcoming, last reporting period will be used to: (1) comprehensively analyze the complete set of quantiative and qualitative data generated in this project, (2) to draft two or three paper mansucripts (number of manuscripts depends on the robustness of the statistical results) and to submit them for publication in applied economics journals, (3) to share project findings in presentations at behavioral economics and consumer behavior conferences (e.g., meetings of the American Economics Association, Association of Consumer Research, if submission is accepted), national practitioners' meetings (e.g., CFED Assets Learning Conference), and at policy forums (e.g., RAND Behavioral Finance Forum, if submission is accepted), (4) to integrate the findings in our teaching of economcis and consumer behavior courses; and (5) to identify social-sector collaborators and reach out to funding agencies in order to apply for follow-up grants to expand our findings to larger consumer populations, for instance, to assist consumers in repaying credit card debt.
Impacts
What was accomplished under these goals?
In a series of field experiments we test whether saving and retention rates in a federally funded, matched savings program for low-income families – the Individual Development Account (IDA) program – can be improved through the introduction of program features inspired by behavioral economics. Data collection for the experiments was completed on February 28, 2013. This report presents the major results for the first time. It provides an overview of our main findings as we now start to develop comprehensive manuscripts for each of the experiments and their results. We will continue sharing our findings over the upcoming months as we delve deeper into data analysis. The experiments test the impact of: a) an increase in the frequency with which deposits are made, b) an increase in the accountability associated with deposits, and c) the introduction of lottery-based savings matches at the time of each deposit. We report evidence from 907 study participants at eight IDA agencies across the U.S. who agreed to randomly assign participants to different experimental conditions. We have several interesting, highly relevant results: Savers in the lottery condition are more likely to deposit regularly, even accounting for their bi-monthly deposit deadline. This finding supports the motivating nature of the lottery intervention. The experiment that tests the frequency of savings deposits documents impressively the importance of timing of behavioral economics interventions. The intervention was most effective during the difficult 14-month stretch in the middle of program participation. Placing reminder and accountability calls at deposit deadline showed its success in motivating savers to make a deposit at all. Regarding the increasing-match experiment, savers in the reminder-call-plus-match-increase group saved less and made fewer savings deposits than savers in the reminder-call-only group. Reasons for this unexpected, counterproductive result may be in the promise of a higher match rate appearing unrealistic or too far in the future. Overall, we find that savers conform only slowly to the deposit schedule of the savings program. As a result, differences in the savings outcomes of treatment and control group participants are most salient when comparing data over multiple years, from program entry to exit.
Publications
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Progress 01/01/12 to 12/31/12
Outputs
OUTPUTS: As of December 01, 2012, 959 IDA participants were participating in the research project. We stopped enrollment in the research study on October 01, 2012 to allow for at least six months of participation in the interventions before the research project is scheduled to end in May 2013. This May, Caezilia received a large grant of $249,622 from the University of Kentucky Center for Poverty Research Research Program on Childhood Hunger, a program funded by the Food and Nutritional Service of the United States Department of Agriculture. We will survey savings program participants of the past 10 years to examine another side effect of program participation: families food security. This research will complement our findings about the use of services of the fringe economy that we examined in the current project. We expect to find low and very low food security during (1) the early stage of the program due to the high demand placed on a family financial resources and management skills and (2) late in the program and at asset purchase after families face the expenses of moving into a new home, starting a small business, or returning to college, financial resources may be extremely tight. In the longer term, we expect to find increasing levels of food security among families who successfully complete the program. Our current partner sites will be part of the sampling frame of this new project, which will run for two years, until 2014. PARTICIPANTS: Our key findings for the funding period are: (1) Savers conform only slowly to the deposit schedule of the savings program. As a result, differences in the savings outcomes of treatment and control group participants emerge slowly and are most salient when comparing data from program entry to exit. (2) Savers who were asked to make two deposits per month have total savings of about one-third higher than those who continued with the regular monthly deposit schedule. They tend to save about $42 per month, while the monthly savers only save about $24. (3) Savers who receive any combination of reminder and accountability calls are more likely to make a deposit and tend to deposit more on each deposit deadline than those who do not receive calls. They save about $54 per month, while no-call group participants only save at a rate of about $32 per month. (4) Savers in the lottery condition are more likely to deposit regularly, even accounting for their bi-monthly deposit deadline. It sums up to an average of 14 deposits, compared to 11 deposits of the control group. This finding supports the motivating nature of the lottery intervention. (5) After only 12 months of data collection, we see a slight effect of the match-increase intervention. The increasing-match group saved an average of $595, compared to $569 for the control group. Regression analysis confirms that participants in the increasing-match condition tend to deposit more in any given month. TARGET AUDIENCES: In a series of field experiments we test whether saving and retention rates in a federally funded, matched savings program for low-income families, the Individual Development Account (IDA) program, can be improved through the introduction of program features inspired by behavioral economics. PROJECT MODIFICATIONS: No modifications at this stage, but the results suggest that behavioral economics can effectively encourage regular saving in asset-building programs but that interventions require careful testing to achieve best possible outcomes.
Impacts
This project addresses the predictors of saving in the lives of low-income families in several novel and significant ways. First, it presents the first controlled, systematic study of how program characteristics affect out-comes for low-income savers. Second, it helps us better assess the strategy of using decision biases or vices that normal undermine decision quality to, instead, improve it (Nava Ashraf, Karlan, & Yin, 2005; Choi, Laibson, & Madrian, 2004; Thaler & Benartzi, 2004). Experiment 1 tests the use of peoples tendencies to underweigh small dollar amounts as a tactic to increase savings. Similarly, Experiment 3 utilizes the tendency to underweigh small probabilities. Experiment 2 sheds light on the importance of accountability as a psychological process that facilitates savings. Further, the design of these three experiments allows us to parse out the relative contribution of each psychological mechanism. Third, this research is the first to examine whether IDA program participation reduces reliance on fringe financial services and whether savings result from decreases in consumption. It is imperative to ensure that saving in IDAs does not carry the unintended consequence of creating a cash constraint sufficient to increase the use of high-cost lending. Finally, it is the first to develop best practice recommendations for managing and designing IDA programs based on concepts of behavioral economics. The analysis allows us to draw causal inferences regarding the effect of each of our interventions. Field experimentation is critical here, not only to ensure that an intervention is effective but also to safeguard against unintended consequences before results are implemented on a wider scale.
Publications
- Loibl, Caezilia, Lauren Jones, Emily Haisley, and George Loewenstein. 2012. Testing Strategies to Increase Saving and Retention in Individual Development Account Programs, RAND BeFi Forum Public Policy Roundtable. Loibl, Caezilia, Lauren Jones, Emily Haisley, and George Loewenstein. 2012. Testing Strategies to Increase Saving and Retention in Individual Development Account Programs, Research Forum Ideas Into Action: An Applied Research Forum for the Assets Field at CFED 2012 Assets Learning Conference.
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Progress 01/01/11 to 12/31/11
Outputs
OUTPUTS: First Quarter 2011 Data collection started at 5 new research sites: 1. Connecticut Department of Labor and CTE, Inc., Wethersfield, Connecticut; 2. Domestic Violence Association, Frankfort, Kentucky; 3. Oakland Livingston Human Service Agency, Pontiac, Michigan; 4. Convenant Community Capital, Huston, Texas; and 5. CASA of Oregon, Newberg, Oregon. Collection of savings deposit data, study participant demographic and financial behavior data continued as planned at our first three research sites: 1. United Way of Greater Los Angeles, California; 2. United Way of Greater St. Louis, Missouri; and 3. Capital Area Asset Builders, Washington, D.C. Updated project database We worked with our IT staff to allow for more detailed data entry as study participants start to graduate from the savings program. Developed phone-based project survey We had originally planned to ask the IDA program case managers to collect study participants experiences with the research project on paper when clients exited the savings program. Unfortunately, data collection at program exit has proven to be difficult because contact to program participants stops when they drop out of the program. If program participants complete the program in a regular fashion, there appears to be little time and energy to complete surveys. We hired Saperstein Associates, a market research agency to conduct the interviews for us on the phone. This company has already helped successfully with phone recruitment into the research project. Second Quarter 2011 Collected study participants experiences with phone-based survey During these three months, Saperstein Associates, were able to schedule interviews with 47% (N=90) of study participants at our three longest-running research sites. Here are some quotes: What was good about the calls --JUST HAVING THAT FRIENDLY AND COURTEOUS REMINDER WAS HELPFUL. IF I WANTED TO BUY A PAIR OF SHOES AND I GOT A REMINDER I WOULD TELL MYSELF THAT I SHOULD NOT BUY THE SHOES AND MAKE THE DEPOSIT. --IT ENCOURAGED YOU TO SAVE OR HELPED YOU REMEMBER IF YOU HAD A LOT GOING ON IN YOUR LIFE. --IT HELPED ME TO REMEMBER, AND IT HELPED ME TO KEEP GOING BECAUSE I KNEW THEY WERE COMING. What was bad about the calls --I WOULD GET THE CALLS AFTER I MADE A DEPOSIT. I NOW RECOGNIZE THE NUMBER ON THE CALLER ID AND DON'T PICK UP. --IT COULD BE OVERWHELMING WHEN YOU ARE BUSY, ALMOST LIKE A BILL COLLECTOR. --IT WAS AN AUTOMATED MESSAGE, AND SOMETIMES IT WOULD TALK TO MY VOICE MAILBOX. IT'S JUST SOMETHING I DIDN'T LIKE. Collection of savings deposit data, study participant demographic and financial behavior data continued as planned at our eight research sites during this quarter. Third and Fourth Quarter 2011 Collection of savings deposit data, study participant demographic and financial behavior data continued as planned at our eight research sites. A total of 711 savers have been enrolled in the research project as of November 15, 2011. PARTICIPANTS: Nothing significant to report during this reporting period. TARGET AUDIENCES: We have currently enrolled 711 savings program participants in our research study. Savings program eligibility is based on household income of less than 200% of the federal poverty level. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.
Impacts
Proof of concept Intervention: The strongest results, so far, come from our proof of concept field experiment at United Way of Greater Los Angeles. In this experimental set-up, savers in the treatment group consented to (1) deposit twice per month, (2) receive a reminder call before and an accountability call after each deposit deadline, and (3) receive their savings match in a lottery distribution. The control group participates in the standard IDA program; it does not receive any of the three new program features. We have been collecting data at this site since in December 2008. We find that savers in the treatment group saved an average of $324 more than their peers in the standard savings program. This finding is statistically significant (p < 0.01). Increase in Match, Frequency of deposit, and Accountability: Interventions Similar to the proof of concept intervention, the effectiveness of our other experimental designs becomes measureable as the number of data points increases with study participants advancing in the IDA program closer toward program completion. For instance, data collected during the past 10 months at Convenant Community Capital, Houston, Texas, indicate that the accountability feature may hinder savings efforts. On average, savers deposited $674 at the no-call group, $650 in the reminder-call group, but only $485 in the two-call, reminder-and-accountability-call, group. Mean comparison tests are not significant yet. Data collected over the remaining project months will be critical in establishing whether this observation can be supported with statistical tests at this and at our other research sites. We will also use saver financial behavior measures, collected in a survey at program enrollment, to explain our findings.
Publications
- Loibl, Caezilia, Presenter. 2011. More than a place to live: Helping low- to moderate-income homeowners build assets. Ohio Housing Conference. Ohio Housing Finance Agency and Ohio Capital Corporation for Housing. Columbus, Ohio. (November 29)
- Loibl, Caezilia, Presenter. 2010. Determinants of saving in low-income households. Invited talk at the OSU Department of Consumer Sciences. (November 15)
- Loibl, Caezilia, Presenter. 2011. Determinants of saving in low-income households. Invited talk at the Department of Consumer Science, University of Wisconsin-Madison. (February 7)
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Progress 01/01/10 to 12/31/10
Outputs
OUTPUTS: Primary Activities and Accomplishments: Implement field experiments and survey research at partner agencies 1 and 2: Goal accomplished. Project implementation started at United Way of Greater Los Angeles, Los Angeles, California and the Economic and Community Development Institute, Columbus, Ohio Analyze experimental and survey data to fine-tune experimental setup at partner agencies 1 and 2: Goal accomplished. Data analyzed and procedures adjusted, see Lauren Jones masters thesis Start project implementation at partner agencies 3 and 4: Goal accomplished. Project implementation started at partner agencies 3 and 4, United Way of Greater St. Louis and Capital Area Asset Builders. Recruit and start project implementation at 6 new agencies: Goal almost accomplished. We recruited 6 new partner agencies. Project implementation started at 4 agencies: Connecticut Department of Labor (CT), Kentucky Domestic Violence Association (KY), Convenant Community Capital (TX), Oakland Livingston Human Service Agency (MI). Project paperwork is being processed for CASA of Oregon (OR) and the implementation at Foundation Communities (TX) is on hold due to changes in the agency. Visit to field experiment sites: Goal changed. Phone conference calls and online webinars via WebEx were sufficient to plan the project and train case managers. Share activities with national Assets for Independence program, U.S. Department of Health and Human Services: Goal not accomplished. Activities will be shared as soon as robust results are available. PARTICIPANTS: Nothing significant to report during this reporting period. TARGET AUDIENCES: The target audience of this research project are low- to moderate income individuals and families whose household incomes are at or below 200 percent poverty level. Ten social sector agencies across the nation are part of this research project. We are currently collecting data at 8 sites, 1 site is on hold, and 1 site is completed. We are excited about our set of partner agencies which represent the spectrum of social sector agencies offering this savings program. We now have United Ways, a state Department of Labor, a domestic violence association, community action agencies, a micro-finance agency, a housing agency, as well as larger (550 clients/yr.) to smaller (30 clients/yr.) agencies, single-site and statewide networks in our research project. Based on our diverse group of collaborators, we are confident that our data will provide rich insights in the effectiveness of behavioral interventions on savings behavior. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.
Impacts
The proposed research will result in outcomes that are novel in several ways: 1. New insight into the optimal incentive structure to motivate retention and asset accumulation. This outcome will increase IDA program participants motivation to complete the program and to deposit regularly with an IDA program design that does not require additional match funds, keep administrative costs low, and necessitate only minor alterations to existing program protocols. 2. New information about the educational benefits of IDA program participation for long-term financial stability. This outcome will provide key metrics for IDA program financial education aimed at reducing the use of fringe and introducing mainstream financial services for banking, accessing credit, saving, and investing. 3. Introduction of innovative technologies to a nationally growing program. This outcome will deliver a phone system, enhanced outcome statements, and flexible goal setting add-ons to IDA program software with the goal to improve saver education, motivation, and accountability. 4. Advancement in the understanding of savings behavior of low-income individuals. This out-come will provide IDA program agencies with effective tools to induce regular savings and long-term asset building among low-income families. 5. Recommendations for the policy development of publicly sponsored asset-building programs. Project findings will inform legislation about novel alterations to the current IDA program structure that improve savings and retention in a functional, cost-effective manner.
Publications
- 1. Loibl, Caezilia, 2010, Testing Strategies to Increase Saving and Retention in Individual Development Account Programs. Abstract. Annual Conference of the Association for Public Policy Analysis and Management, Boston, Massachusetts. (November 4 to 6) Unpublished Presentations
- 2. Haisley, Emily, 2010, Increasing Saving and Retention in IDA Programs: Behavioral Economics Research Opportunity. Invited talk at Research at CFED Webinar. (February 24)
- 3. Haisley, Emily, 2010, Economic Jujitsu: Promoting saving through behavioral economics. Invited talk at Google TechTalks. Mountain View, California. (March 1, 2010)
- 4. Loibl, Caezilia, 2010, Applying ideas from behavioral economics to increase savings. Invited talk at The Federal Reserve Bank of Cleveland, Cleveland, Ohio. (April 9, 2010)
- 5. Loibl, Caezilia, 2010, Determinants of saving in low-income households Invited talk at the OSU Department of Consumer Sciences. (November 15)
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Progress 01/01/09 to 12/31/09
Outputs
OUTPUTS: Activity: Implement field experiments and survey research at partner agencies 1 and 2 Output: Goal accomplished. Project implementation started at United Way of Greater Los Angeles, Los Angeles, California and the Economic and Community Development Institute, Columbus, Ohio Activity: Analyze experimental and survey data to fine-tune experimental setup at partner agencies 1 and 2 Output: Goal accomplished. Data analyzed and procedures adjusted, see Lauren Jones' master's thesis Activity: Prepare project implementation at partner agencies 3 to 6 Output: Goal halfway accomplished. Implementation at partner agencies 3 and 4, United Way of Greater St. Louis and Capital Area Asset Builders has been prepared; clients will be enrolled into the experimental features during October/November 2009. We have been discussing implementation with CASA of Oregon and WECO Fund and we are contacting other large, recently funded IDA program agencies to achieve our goal. Activity: Train IDA case managers at partner agencies 3 to 6 Output: Goal halfway accomplished. Case manager training has been conducted at United Way of Greater St. Louis and Capital Area Asset Builders Activity: Visit to field experiment sites Output: Goal changed. We visited the sites in Los Angeles and Columbus to assist during IDA program orientation sessions. We plan to visit our partners in St. Louis and Washington within the next six months, as soon as they start program orientation. So far, phone conference calls and online webinars via WebEx were sufficient to plan the project and train case managers. Activity: Share activities with the "New Strategies for Stronger Outcomes (NSSO)" initiative of the Assets for Independence program, U.S. Department of Health and Human Services Output: Goal changed. Activities will be shared as soon as robust results are available. The NSSO initiative ended in May, but James Gatz, Manager of the federal Assets for Independence program at the Office of Community Services has expressed his interest in obtaining and nationally distributing our project findings. PARTICIPANTS: United Way of Greater Los Angeles, Los Angeles, California "Proof of concept" Treatment group: Reminder and accountability calls, two monthly deposits, lottery match; Control group: No changes to IDA program 43 participants, enrollment is ongoing Implementation started in April 2009 Economic and Community Development Institute, Columbus, Ohio "Accountability" Treatment group: Reminder and accountability calls; Control group: No changes to IDA program 33 participants, enrollment is ongoing Implementation started in April 2009 Capital Area Asset Builders, Washington, D.C. "Accountability" Treatment groups: Reminder and accountability calls; Reminder calls only; Control group: No changes to IDA program 200 current IDA program participants are currently invited to participate Implementation started in November 2009 United Way of Greater St. Louis, St. Louis, Missouri "Frequency of deposit" Treatment group: Two monthly deposits; Reminder and accountability calls; Control group: Reminder and accountability phone calls 78 current IDA program participants will be invited to participate Implementation started in October 2009 Agencies 5 and 6 "Lottery effect" Treatment group: Reminder and accountability calls, two monthly deposits, lottery match; Control group: Reminder and accountability calls, two monthly deposits Recruit partnering agencies until mid-2010. TARGET AUDIENCES: Nothing significant to report during this reporting period. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.
Impacts
We are continuously collecting data at two research sites and are about to start data collection at two additional sites. Feedback from case managers has been collected and used to improve survey instruments, case manager handbook, and implementation procedures. Preliminary analysis of savings data collected from April to November at our partner agency United Way of Greater Los Angeles did not yet show differences in the savings behavior of treatment and control groups. Data quality and robustness will improve with a larger number of project participants and additional time in the IDA program. We expected that it will take about six to nine months for effects to show in our partner agencies. Our previous research documented that clients tend to adapt slowly to program requirements (Loibl, Kraybill, and DeMay 2009). Savings deposit data are still being gathered at the Economic and Community Development Institute, Columbus, Ohio. It required additional time and effort because bank deposit data of IDA program clients are transmitted on paper, not electronically. Feedback from case managers has been collected and used to improve survey instruments, case manager handbook, and implementation procedures. So far, we have received the following feedback from our implementation sites. Project observation at United Way of Greater Los Angeles shows that the experimental conditions, in particular phone reminder calls and lottery matches, are well received. The agency expressed interest in implementing these features in other asset building programs. Similarly, project observation at the Economic and Community Development Institute shows that phone reminder and accountability calls are helping clients meet their deadlines. The Institute inquired whether phone call and deposit frequency features could be offered to their micro loan clients (about 300). National replication of successful program modifications is feasible because the proposed research was selected in the competitive "New Strategies for Stronger Outcomes" initiative of the federal Assets for Independence (AFI) program in October 2007. AFI will serve as an intermediary to disseminate findings and help initiate replication at the 1,200 HHS-funded IDA programs nationwide.
Publications
- Jones, Lauren Eden. 2009. "A Behavioral Approach to Saving: Evidence from a Randomized Field Experiment." Masters thesis. The Ohio State University, Department for Agricultural, Environmental and Development Economics. (August 24)
- Loibl, Caezilia, Emily Haisley, and George Loewenstein. 2009. "Testing strategies to increase saving and retention in Individual Development Account programs." Working paper. National Poverty Center Small Grants Program, Workshop in Ann Arbor. (April 03)
- Loibl, Caezilia. 2009. "Economic and psychological aspects of households' savings behavior: The determinants of saving in low-income households." Abstract. Mannheim Research Institute for the Economics of Aging: Deidesheim, Germany. (June 30)
- Haisley, Emily, Presenter. 2008. "Using behavioral economics to increase the power of incentives." Invited talk at the RAND Corporation. Santa Monica. (December 19)
- Haisley, Emily, Presenter. 2009. "Using lotteries to overcome self-control problems." Presented at the annual meeting of the American Economic Association (AEA). San Francisco. (January 3)
- Loibl, Caezilia and Lauren Jones, Presenters. 2009. "Testing strategies to increase saving and retention in Individual Development Account programs." Presented at the Annual Workshop for Small Grant Recipients: Financial Risk, Assets, and Poverty. National Poverty Center, Gerald R. Ford School of Public Policy, University of Michigan. Ann Arbor, Michigan. (April 3)
- Loibl, Caezilia, Presenter. 2009. "Can the poor be motivated to save Evidence from survey research and field experiments in the United States." Presented at the seminar of the Department of Agricultural, Environmental and Development Economics, The Ohio State University. (November 12)
- Lopez, Veronica. 2009. "Treatment group orientation." Community Financial Resource Center. Los Angeles. (Ongoing)
- Brymer-Bashore, Jeff B. and Scott Shanline. 2009. "Project database." International Data Evaluation Center. The Ohio State University. Columbus. (May 1)
- Loibl, Caezilia, Presenter. 2008. "Using behavioral economics to change savings behavior: New ideas from field experiments with working-poor families in the U.S." Invited talk at the College of Business, Department of Marketing and Consumer Research, Technische Universitaet Muenchen. Freising-Weihenstephan, Germany. (October 21)
- Haisley, Emily, Presenter. 2008. "Applying ideas from behavioral economics to increase savings." Invited talk for the Asset Building Coalition of Greater Los Angeles at the Federal Reserve Bank of San Francisco. (November 7)
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