How Important Is Temptation Spending? Maybe Less than We Thought

Abstract Temptation plays a key role in theoretical work on spending and saving in developing countries. The limited empirical evidence on its importance, however, suggests that cash transfers do not induce increases in temptation spending. This paper expands the evidence base by studying the effect...

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Veröffentlicht in:The World Bank economic review 2022-05, Vol.36 (2), p.433-454
Hauptverfasser: Brune, Lasse, Kerwin, Jason T, Li, Qingxiao
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description Abstract Temptation plays a key role in theoretical work on spending and saving in developing countries. The limited empirical evidence on its importance, however, suggests that cash transfers do not induce increases in temptation spending. This paper expands the evidence base by studying the effect of randomized exposure to temptation on spending decisions in rural Malawi. Consistent with the cash transfer literature, a more tempting environment does not induce significant changes in temptation spending. However, the magnitudes of both temptation spending levels and the treatment effects are somewhat sensitive to the definition of temptation spending used. This paper examines the potential factors that may be driving these null results, and suggests that future research may find a limited role for temptation in the economic decisions of the poor.
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source Oxford University Press Journals All Titles (1996-Current); Alma/SFX Local Collection
subjects Bedeutung/Rolle
Conditional Cash Transfer Programme
Datenaufbereitung
Konsum der privaten Haushalte
Konsumverhalten
Malawi
Sozialhilfe
Sozialleistungen
title How Important Is Temptation Spending? Maybe Less than We Thought
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