The Cost of Convenience? Transaction Costs, Bargaining Power, and Savings Account Use in Kenya

The Cost of Convenience? Transaction Costs, Bargaining Power, and Savings Account Use in Kenya

7 July, 2020    

Individuals across the world often use high-transaction-cost savings devices, even when lower-cost technologies are available. I study this phenomenon via a field experiment where access to ATM cards was randomly assigned to 1,100 newly opened bank accounts in rural Kenya. These cards reduced withdrawal fees by over 50 percent. While the cards increased overall account use, the positive treatment effect is entirely driven by joint and male-owned accounts – in contrast, the treatment had no impact on use of women’s accounts. I find evidence that one important driver of this difference is intrahousehold concerns.

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