We report on the potential American demand for prize-linked savings, a savings account that also awards prizes. Our survey data suggests significant interest among individuals with little actual savings, without regular saving habits, who play lotteries extensively, and are optimistic.

This paper develops a model for the pricing of credit-sensitive debt contracts. Over the past two decades, the debt markets have seen a proliferation of contracts designed to reapportion interest rate and credit risks between issuer and investors. Contracts including credit-sensitive notes...

For over three centuries and throughout the globe, people have enthusiastically bought savings products that incorporate lottery elements. In lieu of paying traditional interest to all investors proportional to their balances, these Prize Linked Savings (PLS) accounts distribute periodic...

The recent financial crisis has led many to question how well businesses deliver consumer financial services and how well regulatory institutions address problems in consumer financial markets. In response, the Obama administration proposed a new agency to oversee consumer financial services,...

We review a wide variety of programs that support savings by families, in particular by low- and moderate-income families. These programs range from ones that literally compel families to save, to those that make it hard not to save, make it easier to save, provide financial incentives to induce...

In this paper, we analyze the spending decisions of over 1.5 million Americans who vary in their degree of revealed credit constraints. Specifically, we analyze how these Americans spend their income tax refunds, using transaction-level data from a stored-value card product. Card-holders may...

In this paper, we review data on U.S. household savings, especially by less-affluent households, discuss theories of savings, and the impediments to savings. These impediments are a combination of factors that influence behavior by households and financial service firms. We discuss a number of...

Families are more likely to save if they can commit to savings before funds are in-hand (and subject to spending temptations). For low- and moderate-income U.S. families, an important savings opportunity arises annually, during income tax season. We study a group of low-income individuals in...

This chapter studies the bidding for a copper mine that was offered for sale by the Peruvian government as part of the country's privatization program. The mine itself had a valuable real option component, in the form of the right to develop the mine after completing exploration, which we...