Can the lure of a lottery jackpot spur people to save more money in the bank?
That is the question Benjamin Iverson wondered when he started researching prize-linked savings (PLS) accounts. The accounts, which are popular overseas, accrue little to no interest. Instead, PLS account holders get entered into jackpot drawings, earning more chances to win as they invest more in the account.
Iverson, an assistant professor of finance at the Kellogg School, used PLS account data from one of South Africa’s largest banks. He was particularly interested in how opening a PLS account impacts the total savings of people who are financially at-risk because they have little other savings and high amounts of debt.
Watch this brief and informative explainer video to learn more about the benefits, challenges and policy implications for prize-linked savings (PLS) accounts.
More detail at Kellogg Insight: [ Ссылка ]
