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Randomization for Causality, Ethnography for Mechanisms: Illiquid Savings for Liquor in an Autarkic Society (WP-21-56)

Ricardo Godoy, Dean Karlan, and Jonathan Zinman

What should researchers do when confronted with surprising results? Financial access innovations usually leave “temptation” spending unaffected or reduced. However, the authors found that promotion of savings lockboxes in a largely autarkic society increased alcohol consumption and blood pressure, despite no one reporting intentions to save for alcohol. To probe mechanisms that could explain this pattern, they then used ethnographic methods, including direct observations of drinking (“scans”) and debriefing interviews to discuss the earlier trial results. The researchers learn that sponsoring drinks confers prestige, but the stigma attached to drinking by outsiders likely discouraged reporting intentions to save for it.

Ricardo Godoy, Professor of International Development, Brandeis University

Dean Karlan, Frederic Esser Nemmers Chair, Professor of Economics and Finance, and IPR Associate, Northwestern University

Jonathan Zinman, R. Stephen Cheheyl Professor of Economics, Dartmouth College

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