Home > Research . Search . Country . Browse . Small Grants

PSC In The News

RSS Feed icon

Thompson says criminal justice policies led to creation of prison gangs like Aryan Brotherhood

Schmitz finds job loss before retirement age contributes to weight gain, especially in men

Kimball says Fed should get comfortable with "backtracking"

Highlights

Overview of Michigan's advanced research computing resources, Monday, June 27, 9-10:30 am, BSRB - Kahn Auditorium

U-M's Data Science Initiative offers expanded consulting services via CSCAR

Elizabeth Bruch promoted to Associate Professor

Susan Murphy elected to the National Academy of Sciences

Next Brown Bag

PSC Brown Bags
will resume fall 2016

Effect of Income Timing and Structure on Savings and Consumption Behavior

a PSC Small Fund Research Project

Investigator:   Jason Kerwin

The response of consumption to the temporal structure of income streams is fundamental to life-cycle decision making, with important implications for questions about savings, investment, and retirement. It is commonly assumed that less frequent, lumpier income streams can spur savings by helping people overcome the urge to purchase “temptation goods” like alcohol and cigarettes, and by combating pressures from social networks. This assumption is one factor driving the research on commitment savings accounts. On the other hand, converting smooth income streams into larger, deferred sums may also lead to increased temptation and potentially poor choices: “money burning a hole in your pocket”. This project will use an RCT conducted in
rural Malawi to determine which of these effects dominates. We will recruit a random sample of 450 Malawian adults and randomly assign them into three treatment arms – one receiving a smooth stream of income and the other two receiving large lump sums instead. The first lump sum group will receive their lump sums on dates they specify as useful for having a large sum of cash, while the second will receive lump sums on dates that are notably tempting, such as the night before a major local market day.

Funding Period: 03/01/2013 to 06/30/2014

Support PSC's Small Grant Program

Search . Browse