Abstract
A large fraction of households have very little savings buffer and are therefore vulnerable to financial shocks. This paper examines whether a social norm nudge can induce such households to save more. We ran a large-scale field experiment at a retail bank in the Netherlands. We find that households who are exposed to the social norm nudge click more often on a link to a personal web page where they can start or adjust an automatic savings plan. However, analyzing detailed bank data, we find no treatment effect on actual savings, neither in the short run nor in the long run. Our null findings are quite precisely estimated. A complementary small-scale survey experiment suggests that people did notice the social norm nudge and also that it had an impact on savings intentions.
Highlights
Interventions that provide financial education or information have often failed to create substantial and lasting behavior change or are very expensive.3 A low cost intervention that has proven to be successful in many other settings is social norm nudging: informing people that their behavior deviates from what most others do has been found to be a powerful trigger to change behavior in the direction of the descriptive social norm.4 Social norm nudging has so far been rarely studied as a way to stimulate households to increase their savings.5 Social norm nudges hold promise in this context given the abundance of evidence on peer effects in financial decisions
We ran a small-scale survey experiment and a large-scale field experiment at a retail bank in the Netherlands to study the impact of a social norm nudge on buffer savings by households
We added a social norm nudge to an email message from the bank promoting savings
Summary
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