Aspirations and Financial Decisions : Experimental Evidence from the Philippines
A randomized experiment among poor entrepreneurs tested the impact of exogenously inducing higher financial aspirations. In theory, raising aspirations could have positive effects by inducing higher effort, but could also reduce effort if unmet asp...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/475171615987748251/Aspirations-and-Financial-Decisions-Experimental-Evidence-from-the-Philippines http://hdl.handle.net/10986/35294 |
| Summary: | A randomized experiment among poor
entrepreneurs tested the impact of exogenously inducing
higher financial aspirations. In theory, raising aspirations
could have positive effects by inducing higher effort, but
could also reduce effort if unmet aspirations lead to
frustration. Treatment resulted in more ambitious savings
goals, but nearly all individuals fell far short of reaching
these goals. Two years later, treated individuals had not
saved more, and actually had lower borrowing and business
investments. Treatment also reduced belief in the amount of
control over one’s life. Setting aspirations too high can
lead to frustration, leading individuals to reduce their
economic investments. |
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