Unlocking the Black Box of Savings: Using Quantitative Theory and Microfinance

Why do the poor save?  Joseph Kaboski’s research project utilizes structural quantitative theory and a theory-driven randomized microfinance experiment to understand the importance of precautionary and entrepreneurial motives in driving the savings behavior of poor people in developing countries. By estimating the distribution of motives in the population, Kaboski will be able to simulate the impacts of credit and savings interventions on individuals and, potentially, at the aggregate level.

Kaboski’s study -- a pilot in anticipation of a larger scale project funded by the National Institutes of Health -- involves a randomized evaluation of 300 individuals in the Fort Portal area of Uganda. 

Research Questions: 
  • What portion of household saving is for precautionary reasons versus for self-financing or entrepreneurial reasons?
  • What can simulations of the impacts of credit and savings interventions suggest about the impact of increased intermediation on saving, borrowing, investment, and consumption?
Data Notes: 

Survey Time Frame and Rounds:

  • Pilot baseline amd savings treatment, September 2013
  • Two midline surveys to assess how savings account has affected behavior
  • Loan treatment, October 2013
  • Pilot endline, December 2013

Survey size:

  • 300 individuals


  • Households

Intervention: Participants will be given access to free savings accounts and lending products.

Pride Microfinance
In Progress