Case Studies

The Coin Study

People frequently save less for the future than they should. Which behavioral interventions and financial incentives do the most to increase the saving rate of individuals with low and irregular income?

Hypothesis: Salient reminders in the environment can be a great way to promote habit formation. With saving, we have many reminders in our environment to spend, but very few to save. We predicted that the use of a reminder, like a fake coin, would be more effective at increasing saving than a standard financial incentive would be. We also predicted that the use of emotions, through framing messages as though they came from children of the participants, would be an effective measure.

Experiment: In collaboration with M-PESA (a savings product in Kenya), we conducted an experiment on a subset of their users, testing which intervention resulted in the greatest average savings. Subjects were randomly assigned to receive one of the following interventions:

  1. No intervention.
  2. Control: A simple text message reminder to save.
  3. Children: A text message reminder to save framed as though from their children: “Hi <daddy>, Please deposit as much as you can this week to MBAO PENSION PLAN for our future! Thank you for saving. <Jane>”
  4. Coin: A fake gold coin with a number for each week of the study (as a physical reminder of savings). Subjects received a text asking them to mark each week’s number if they saved.
  5. Ex-post match 10%: Subjects received an extra 10% for their savings (up to 100 shillings), deposited at the end of the week
  6. Ex-post match 20%.
  7. Pre-match 10%: The 100 shilling maximum match was deposited at the start of the week – if subjects didn’t earn the full match, the difference was removed
  8. Pre-match 20%.
  9. Combined pre-match 10% and Children.
  10. Combined ex-post match 10% and Children.
  11. Combined pre-match 10% and Coin.
  12. Combined ex-post match 10% and Coin.


Results: As predicted, we found that the coin was more effective than the other forms of motivation and that framing the message as though it came from their children was a stronger motivator than most forms of matching.


Applications: Our analysis suggests that the coin was so effective in part because it served as a constant reminder to save in the everyday environment. Coupled with a simple action and the small but satisfying reward of scratching off the coin, it was a great way to form a saving habit. Placing reminders in an environment can be an effective strategy in a large variety of contexts. For example, a tool like a calendar can simultaneously track the desired behavior (which is a source of motivation in itself) and serve as a reminder every time it is seen.