Competition as a Savings Incentive: a Field Experiment at a Homeless Shelter

This paper describes a randomized field experiment testing the impact of a savings competition on the behavior of homeless individuals staying at a transitional shelter. When monetary prizes were offered for achieving the highest savings rates within a particular month, savings increased while income and attendance at case management meetings remained unchanged. However, repeating the competition in the following month had no effect. This is because individuals who increased their savings rate in response to the competition left the shelter after the first month. In general, while income is positively correlated with continued stay at the shelter, saving at high rates appears to predict early exit.