November 4, 2009
Study Suggests Text Messages Can Increase Savings
Quite an attention grabbing headline from the WSJ, claiming text messages are good for savings.
A new study by a group of economists looking at why people save money found that simply sending out cellphone reminders increased savings balances by 6%.
The study challenges the idea that people simply don't have enough self-control to save. Instead, the problem may be they just aren't paying attention, said Dartmouth University economics professor Jonathan Zinman, one of the study's four authors. "Savings isn't at the top of their mind," said Zinman. "Basically all we did was remind them."
... In three cases conducted in the Philippines, Peru and Bolivia, the economists teamed up with local banks to send reminders to people randomly selected from those who had recently opened a savings account.
The banks sent several different types of messages, including letters in Peru and text messages in Bolivia and the Philippines. Some used negative language to stress the consequences of not saving money.
"If you don't frequently deposit into the Gihandom Savings account, your dream will not come true," warned one message in the Philippines.
While positive or negative language did not have a significant effect on the savings rate, mentioning a customer's specific goal did. When reminders mentioned incentives offered by the bank for consistent deposits, bank savings increased by almost 16%.
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