Date of Graduation

5-2018

Document Type

Thesis

Degree Name

Bachelor of Science in Business Administration

Degree Level

Undergraduate

Department

Accounting

Advisor

Thomas, JaLynn

Reader

Yeager, Timothy

Abstract

This research finds that access to prize-linked savings could improve the financial security of Arkansans. Prize-linked savings (PLS) accounts are nontraditional savings products that offer depositors the chance to win cash prizes instead of a typical interest rate return. Given the low median incomes, high liquid asset poverty rates, and high levels of underbanked and undereducated individuals in Arkansas, there is a need for an innovative savings solution like PLS in the state. PLS accounts capitalize on individuals’ propensity for lottery-like risk-taking to inspire the productive behavior of personal saving. A wide range of individuals, especially those who could stand to benefit from PLS instruments the most, find these programs attractive. Various PLS programs have proven successful internationally and within the United States, with clear benefits for both savers and organizing financial institutions. Arkansas banks and credit unions should consider the opportunity presented by PLS programs to grow deposits while providing Arkansas households with an effective, entertaining way to increase personal savings and strengthen their financial situation.

Keywords

American Savings Promotion Act, Financial Vulnerability, Behavioral Bias, Savings Accounts, Lottery and Gambling, Save to Win

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