Do Lottery Payments Induce Savings Behavior? Evidence from the Lab
Emel Filiz Ozbay, Jonathan Guryan, Kyle Hyndman, Melissa Kearney, and Erkut Y. Ozbay , ( 126 )
Journal of Public Economics
savings.pdf686.14 KB

This paper presents the results of a laboratory experiment designed to investigate whether the option of a Prize Linked Savings (PLS) product alters the likelihood that subjects choose to delay payment. By comparing PLS and standard savings products in a controlled way, we find strong evidence that a PLS payment option leads to greater rates of payment deferral than does a straightforward interest payment option of the same expected value. The appeal of the PLS option is strongest among men and selfreported lottery players.

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