We invite you to a FAIR Seminar with Patricio Dalton. Patricio is an Associate Professor at the Department of Economics, Tilburg University. His research lies in the intersection between poverty, psychology and decision-making using both formal models and experiments in the laboratory and the field.
Title: The Power of Stickers: Enhancing the Impact of Cash Transfers through Mental Accounting (co-authors: Till Wicker, Daan van Soest)
Abstract: Unconditional cash transfers are a popular social protection policy, but their impact is often short-lived. One plausible explanation is that recipients struggle to budget and plan, leading to insufficient savings for future productive investments. We conduct an RCT with 861 refugee households in Uganda to test a simple twist in cash delivery harnessing mental accounting. Households received their cash transfer in four envelopes with stickers (Education, Health, Investments, Others) instead of a single blank envelope. Immediately after the cash transfer program ends, Treatment households exhibit greater savings and have taken out larger loans. One year later, these households have made more productive investments, particularly in lumpy investments, resulting in higher monthly income and savings, while also paying off their debt. These results were strongest among households that continued using the four envelopes, who also report improved budgeting, planning, and spending discipline.