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...

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Main Authors:	McKenzie, David, Mohpal, Aakash, Yang, Dean
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2021
Subjects:	FINANCIAL LITERACY FINANCIAL EDUCATION SAVINGS ENTREPRENEURSHIP ASPIRATIONS
Online Access:	http://documents.worldbank.org/curated/en/475171615987748251/Aspirations-and-Financial-Decisions-Experimental-Evidence-from-the-Philippines http://hdl.handle.net/10986/35294

id	okr-10986-35294
recordtype	oai_dc
spelling	okr-10986-352942022-09-20T00:10:09Z Aspirations and Financial Decisions : Experimental Evidence from the Philippines McKenzie, David Mohpal, Aakash Yang, Dean FINANCIAL LITERACY FINANCIAL EDUCATION SAVINGS ENTREPRENEURSHIP ASPIRATIONS 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. 2021-03-18T14:49:26Z 2021-03-18T14:49:26Z 2021-03 Working Paper http://documents.worldbank.org/curated/en/475171615987748251/Aspirations-and-Financial-Decisions-Experimental-Evidence-from-the-Philippines http://hdl.handle.net/10986/35294 English Policy Research Working Paper;No. 9586 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper East Asia and Pacific Philippines
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	FINANCIAL LITERACY FINANCIAL EDUCATION SAVINGS ENTREPRENEURSHIP ASPIRATIONS
spellingShingle	FINANCIAL LITERACY FINANCIAL EDUCATION SAVINGS ENTREPRENEURSHIP ASPIRATIONS McKenzie, David Mohpal, Aakash Yang, Dean Aspirations and Financial Decisions : Experimental Evidence from the Philippines
geographic_facet	East Asia and Pacific Philippines
relation	Policy Research Working Paper;No. 9586
description	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.
format	Working Paper
author	McKenzie, David Mohpal, Aakash Yang, Dean
author_facet	McKenzie, David Mohpal, Aakash Yang, Dean
author_sort	McKenzie, David
title	Aspirations and Financial Decisions : Experimental Evidence from the Philippines
title_short	Aspirations and Financial Decisions : Experimental Evidence from the Philippines
title_full	Aspirations and Financial Decisions : Experimental Evidence from the Philippines
title_fullStr	Aspirations and Financial Decisions : Experimental Evidence from the Philippines
title_full_unstemmed	Aspirations and Financial Decisions : Experimental Evidence from the Philippines
title_sort	aspirations and financial decisions : experimental evidence from the philippines
publisher	World Bank, Washington, DC
publishDate	2021
url	http://documents.worldbank.org/curated/en/475171615987748251/Aspirations-and-Financial-Decisions-Experimental-Evidence-from-the-Philippines http://hdl.handle.net/10986/35294
_version_	1764482732894715904

Aspirations and Financial Decisions : Experimental Evidence from the Philippines

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