Endowment Effects and Usage of Financial Products: Evidence from Malawi
Endowment Effects and Usage of Financial Products: Evidence from Malawi
7 July, 2020 •Similar Articles
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Savings account holders are significantly less likely to switch to another, cheaper account, compared to new clients given a choice between the two accounts. While 42 percent of account holders retained their original, expensive accounts, none of the new clients chose the expensive accounts. We exploit previous experimental variation in account usage and find that account holders that used their account more frequently are more likely to switch. This suggests that induced familiarity with the account can mitigate the endowment effect.