Savings and Personal Discount Rates in a Matched Savings Program for Low-Income Families

The West Coast Poverty Center released a short summary about a study that explores matched savings programs and low-income people's ability to accumulate assets depending on individual desires to save and ability to act on those preferences. The paper defines "time preference," a concept that describes how present- or future-oriented a person may be, and discusses the ways in which variations in time preferences are important for understanding individual financial outcomes. The researchers used data from a 2002-2009 matched savings program to conduct factor analysis, and found that persons with lower future orientation had significantly lower average savings deposit amounts in their first year in the matched savings program.