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The Cost of Convenience?: Transaction Costs, Bargaining Power, and Savings Account Use in Kenya

The Cost of Convenience?: Transaction Costs, Bargaining Power, and Savings Account Use in Kenya ABSTRACT: Individuals across the world use high-transaction-cost savings devices even when lower-cost technologies are available. High costs may help savers protect resources from the demands of others. I investigate this hypothesis by randomly assigning ATM cards to 1,100 newly opened bank accounts in rural Kenya. These cards reduced withdrawal fees by 50 percent. While the cards increased overall account use, the positive treatment effect is entirely driven by joint and male-owned accounts. I find evidence that these differences are driven by intrahousehold issues: Household bargaining power is a key mediator of the ATM treatment effect. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Human Resources University of Wisconsin Press

The Cost of Convenience?: Transaction Costs, Bargaining Power, and Savings Account Use in Kenya

Schaner, Simone
Journal of Human Resources , Volume 52 (4) – Oct 27, 2017
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University of Wisconsin Press
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©by the Board of Regents of the University of Wisconsin System
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1548-8004
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Abstract

ABSTRACT: Individuals across the world use high-transaction-cost savings devices even when lower-cost technologies are available. High costs may help savers protect resources from the demands of others. I investigate this hypothesis by randomly assigning ATM cards to 1,100 newly opened bank accounts in rural Kenya. These cards reduced withdrawal fees by 50 percent. While the cards increased overall account use, the positive treatment effect is entirely driven by joint and male-owned accounts. I find evidence that these differences are driven by intrahousehold issues: Household bargaining power is a key mediator of the ATM treatment effect.

Journal

Journal of Human Resources – University of Wisconsin Press

Published: Oct 27, 2017

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