Saving and Well-Being at the Base of the Pyramid: Implications for Transformative Financial Services Delivery. (August 2015)

• Record Type: Journal Article
• Authors: Martin, Kelly D.; Hill, Ronald Paul
• Other Names: Anderson Laurel guest-editor.; Ostrom Amy guest-editor.
• Is Part Of: Journal of service research. Volume 18:Number 3(2015:Aug.)
• Page Start: 405
• Page End: 421
• Publication Date: 2015-08
• Subjects: saving behavior -- financial services -- impoverished consumers; Customer services -- Periodicals; Service industries -- Periodicals; 658.81205
• DOI: 10.1177/1094670514563496
• Languages: English
• ISSNs: 1094-6705

Abstract

Although much saving research has been conducted in affluent nations, little is known about consumer saving and well-being at the base of the pyramid, which includes over 3 billion people who live on less than US$2.50 per day. Research evidence suggests that financial situation, and especially saving, is central to well-being in impoverished societies; however, to our knowledge, this relationship has not been tested with a global sample. Thus, in this study, we consider how societal poverty, individual saving ability, and satisfaction with one's household financial situation influence well-being. Further, we examine how poverty moderates the relationship between individual financial drivers and well-being to test the saving-well-being centrality assumption. Our multilevel study uses hierarchical linear models with about 50, 000 consumers across 38 countries and demonstrates that as societal poverty increases, well-being decreases. Yet in high-poverty societies, saving greatly improves well-being. This significant finding among saving, poverty, and well-being is particularly telling, as household financial satisfaction was not moderated by societal poverty. As a result, we suggest novel transformative financial services that should improve the lives of the poor through formal saving mechanisms that are grounded in their lived experiences.