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We don’t think about saving money very often. When we finally do think about it, our thoughts rarely lead us to save more. To test the extent that the design of digital wallets could influence behavior, Dan and his colleagues conducted a large-scale experiment with thousands of customers of a mobile money-saving system in Kenya. Some participants received two text messages every week: one at the start of the week to remind them to save and another one at the end of the week with a summary of their savings. Other participants got slightly different text reminders: It was framed like it came from their kid, asking them to save for “our future.” Four other groups were bribed (formally known as “financially incentivized”) for saving. The first of these groups got a 10 percent bonus for the first 100 shillings that they saved. The second group got a 20 percent bonus for the first 100 shillings that they saved. The third and fourth groups got the same 10 percent and 20 percent bonuses for the first 100 shillings that they saved, but they got it together with loss aversion. (In these conditions, the researchers placed the full amount of the match—10 or 20 shillings—into their account at the beginning of the week. The participants were told that they would get the match based on how much they saved, and that the amount of the match that they did not save would be taken out of their account. Financially, this loss aversion approach was the same as the regular end-of-the-week match, but the idea was that experiencing money leaving their account would be painful and would get the participants to increase their savings.) A final set of participants received those same text messages plus a golden-colored coin with the numbers 1–24 engraved on it, to indicate the 24 weeks that the plan lasted. These participants were asked to place the coin somewhere visible in their home and scratch with a knife the number for that week to indicate if they saved or not.2 At the end of six months, the treatment that performed spectacularly better than every other was—drumroll please!—the coin. Every other treatment increased savings a bit, but those who received the coin saved about twice as much as those who only received text messages. You might think the winner would have been the 20 percent bonus or maybe the 20 percent bonus with loss aversion—and this is in fact what most people predict would be the most effective way to get people to save—but you’d be wrong.
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