Leveraging the Lottery for Financial Inclusion

Lotto-Linked Savings Accounts in Haiti

Bibliographic Data

ID4977969
AuthorsFelipe Dizon, Travis J Lybbert (0000-0002-4905-4881, University of California, Davis)
Year2021
Volume69
Issue4
Pages1323-1349
Publication date2021-07-01
Open AccessNo
TypeARTICLE
VenueEconomic Development and Cultural Change (JOURNAL)
Journal identifiersISSN: 0013-0079 • E-ISSN: 1539-2988
PublisherUniversity of Chicago Press (PUBLISHER • US)
DOI10.1086/705681
OpenAlexW2966701471
LanguageEN
Citations received3
References cited19

Many poor Haitians are more familiar with lottery wagers than any other financial transaction and lack access to savings products. Using a lab-in-field experiment in Haiti, we test a prototype lotto-linked savings (LLS) product that returns lotto credit in lieu of interest. We find that LLS increased total savings by 22%, nearly twice the savings increase induced by raising the interest rate from 5% to 20%. The presence, rather than the extent, of the lotto component seems to drive this savings response most. The LLS-induced increase in savings was financed by reductions in lotto spending and traditional savings and smaller reductions in consumption. These reallocations increased subjects’ overall expected returns in the experiment. Those who allocated more to the lottery before LLS and who overweight small probabilities increased savings most in response to LLS

Business · Consumption (sociology) · Database transaction · Economics · Financial inclusion · Financial services · Lottery · Microeconomics · Product (mathematics) · Savings account · Computer Science · Finance · Gambling Behavior and Treatments · Housing Market and Economics · Microfinance and Financial Inclusion

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