Savings and prize-linked savings accounts

Arbeitspapier

Many households have insufficient savings to handle moderate and routine consumption shocks. Many of these financially fragile households also have the highest lottery expenditures as a proportion of income. This combination suggests that Prize-Linked Savings (PLS) accounts, that combine principal-security with lottery-type jackpots, can increase savings among these at-risk households. Results from an online experiment show that the introduction of PLS accounts increase total savings and reduce lottery expenditures significantly, especially among individuals with the lowest levels of savings and income. The results imply that PLS accounts offer a plausible market-based solution to nudge individuals to increase savings.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 6927

Classification and Topics

• Classification: Wirtschaft ; Macroeconomics: Consumption; Saving; Wealth ; Household Saving; Personal Finance ; Design of Experiments: Laboratory, Individual ; Sports; Gambling; Restaurants; Recreation; Tourism ; Consumer Economics: Empirical Analysis
• Subject: savings ; individual decision making ; personal finance ; lotteries ; experimental economics ; Sparen ; Entscheidung ; Private Finanzplanung ; Glücksspiel ; Test

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Atalay, Kadir ; Bakhtiar, Fayzan ; Cheung, Stephen L. ; Slonim, Robert
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/67228
• Last update: 10.03.2025, 11:41 AM CET