Do Opposites Detract? Intrahousehold Preference Heterogeneity and Inefficient Strategic Savings

This paper uses a field experiment to test whether intrahousehold heterogeneity in discount factors leads to inefficient strategic savings behavior. Schaner gave married couples in rural Kenya the opportunity to open both joint and individual bank accounts at randomly assigned interest rates. She also directly elicited discount factors for all individuals in the experiment. Couples who were well matched on discount factors were less likely to use costly individual accounts and responded robustly to relative rates of return between accounts, while their poorly matched peers did not. Consequently, poorly matched couples sacrificed significantly more potential interest earnings on their savings.