to which one and only one person has legal control, and measuring its impact on both decision
making power and household outcomes.3
We designed and implemented a commitment savings product with the Green Bank of
Caraga, a rural bank in the Philippines. Current bank clients were randomly chosen to receive an
offer to open an additional “commitment” account in their own name. Of course, commitment
devices for savings could benefit those with self-control as well as familial or spousal control
issues. The literature on household savings, and on informal savings devices in particular, has
focused on separating self-control motivations and impacts from spousal or familial-control
explanations (Anderson and Baland 2002; Gugerty 2006). However, such devices can serve both
purposes. Indeed, we find compelling evidence for both motives.
The savings product provided individuals with a commitment to restrict access to their
savings. Each individual defined either a “date” goal or an “amount” goal, and was then not able
to withdraw their funds until the goal was reached. We reported earlier (Ashraf, Karlan and Yin
2006) that after one year individuals who were offered the product increased their savings by
81% relative to a control group, and that in accordance with the theoretical literature on
hyperbolic preferences (Laibson 1997; O'Donoghue and Rabin 1999) and dual-self models (Gul
and Pesendorfer 2001; 2004; Fudenberg and Levine 2005), time-inconsistent individuals were the
ones most likely to demonstrate a preference for this commitment.
Using two new sources of data, a follow-up survey collected after one year and administrative
bank data collected after two and a half years, we examine here the impact of this commitment
savings product on both self-reported decision making processes within the household and the
subsequent household allocation of resources. The product caused an increase in household
3 A commitment savings account could generate differences in household outcomes not because of the
“legal” control built in to the product, but merely because it establishes a norm within the household that
the funds are for certain purposes, and this norm is not then unwound by ex-post reallocation of resources.
This is much akin to the findings in Duflo and Udry (2003) in which crop revenue in Cote d’Ivoire is
labeled as either male, female, or family, and shocks to one “mental account” remain in that account and
are not reallocated fully ex-post.