2 Sep 2021

The Chr. Michelsen Prize awarded to Vincent Somville

Vincent Somville has been awarded the Chr. Michelsen Prize for outstanding development research for the article “Saving by default: Evidence from a field experiment in rural India”. The article examines how savings behavior and how payment mode – cash or bank deposits – affects savings.

More and more people around the world have access to a bank account. One of the implications is a move from cash to account based payments. Can this switch encourage people to save more money? In the article “Saving by default: Evidence from a field experiment in rural India”, Somville and co-author Lore Vandewalle, associate professor of economics at the Graduate Institute of International and Development Studies in Geneva, show how weekly payments into a bank account instead of cash payments lead to an increase in savings.

Vincent Somville is an Assistant Professor at the Norwegian School of Economics (NHH) and an Associated Senior Researcher at the Chr. Michelsen Institute (CMI). He has a PhD in development economics from the Economic School of Louvain in Belgium. In addition to the topic of savings and banking, Somville has done research on a variety of issues in development research - from health, fertility and childcare to tax compliance, entrepreneurship and business development.

 Somville and Vandewalle postulate that when paid on the account, money is saved by default, while payments done in cash are effectively seen as money ready to be spent. They tested their hypothesis in rural India with a group of villagers who either had a bank account or were asked to open one. The villagers then received weekly payments and were randomly allocated to a group being paid on the account (treated) or in cash (control). The study showed that getting money on the bank account increased the account balance by about 110 percent, and that the savings effect was long-lasting.

The Chr. Michelsen Prize committee’s justification for awarding the Chr. Michelsen Prize to Somville states that the article is a significant contribution to our understanding of savings behaviour and how the payment mode – cash or bank deposits – affects savings.

‘First, it shows how behavioral ideas such as defaults, procrastination and inertia may further our understanding of fundamental questions in development economics. Second, it highlights the importance of understanding the underlying mechanisms of individual choice for policy interventions. This paper is highly relevant to the latest financial inclusion policies in India; it reminds policy makers that it is not sufficient to simply give poor people access to formal bank accounts. In order to have an impact on savings, it is also critical that the government moves towards an account-based public transfer policy. As such, the paper illustrates how high-quality research can make important contributions to key policy issues. Financial inclusion and access to new saving strategies is an urgent issue for the poorest of the poor in the world.’

The Chr. Michelsen Prize for outstanding development research is awarded biannually to a researcher below the age of 40 who is based in Norway and/or a Norwegian citizen. The prize aims to highlight and inspire development-related research of high quality and relevance.


The article “Saving by default: Evidence from a field experiment in rural India” was published in American Economic Journal, Applied Economics in 2018. The Chr. Michelsen Prize committee made its decision in 2020, but due to the covid-19 pandemic the award ceremony had to be postponed.