Essay Sample on Assessing Internal and External Validity of the Experiment

The paper discusses the internal and external validity of the Tying Odysseus to the Mast: Evidence from a Commitment Savings Product in the Philippines that was done to evaluate how people respond to two models of savings using natural field experiment in testing whether people would either choose opening savings to account with a commitment feature that restricts access to their funds with benefits while others have savings accounts with no benefits. The paper focuses on the internal and external validity of the experiment.

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Internal Validity

The study on the evidence from a commitment savings product in the Philippines followed all the structures and steps of the study; therefore, the findings of the study can be applied by banks to offer saving options to their clients. The study reflects the behavior of the people in their saving journey for the goals they want to achieve. The findings of the study reflect the views and opinions of the people when it comes to opening a savings account with financial institutions. The study showed that people are committed to the savings plan they subscribe to, and therefore financial institutions need to learn from the study.

The study supports the fact that people are disciplined and focused on achieving their goals through partnerships with financial institutions. The survey indicated that the majority of the participants adhered to the savings agreement. The findings from the experiment support the purpose of having a savings account to enable people to have the discipline in saving for specific goals one desired to achieve within a certain period of time. The experiment took into consideration the concerns of the participants based on the fact that the participants are from different sectors of the economy, such as the informal sector that require support. The lock savings account is a better way to save money as opposed to traditional locked boxes used to save money.

The experiment represents real-life scenarios where people open savings accounts, and face challenges in their savings journey to raise funds for a specific purpose. The participants of the study had an option to choose the account to open. The two accounts have different terms of conditions in terms of the money saved earning interest. The first account does not have an interest, while the second account will earn the owner's interest. All the participants are required to have a commitment to continuous savings for a period of one year. The savings account does not allow people to withdraw money from the savings account from the middle of the savings period.

External Validity

The findings of Tying Odysseus to the mast can be applied in real life to help people remain focused on achieving a certain goal. The study provides evidence that people have different preferences and behaviors when handling different matters. The study can help financial institutions to understand the behavior patterns of people and predict how people will respond to different situations. The findings reflect what financial institutions face while working with their clients to offer financial solutions that the clients want. The findings of the study indicate that saving options enable people to reduce and avoid credit options to raise money for different goals they wish to achieve.

The findings of the study can also help in predicting how people are likely to get committed to the savings product, which will help financial institutions to plan ahead. The study generalized the findings, not considering the fact that people live in different environments around the world; therefore, the findings in the Philippines might not be applicable in other countries. The study is ambiguous in terms of demonstrating how the findings of the study can be applied in different environments to enable people to realize their financial goals. People respond differently to situations; managers who win financial institutions will be able to understand the people more.

The results of the findings are perfect for the application in an environment similar to the environment where the study was conducted. The experimental design was appropriate for the study in terms of the study running through the entire period when the participants were continuing with their experiment. The design of the experiment influenced the findings in terms of considering the individual choices included in the findings of the study. The study left out some characteristics of the participants hence influencing the final conclusion. The factors left out include the choice of the participants that have a longer savings plan. The study is dependent on the variables included.

In conclusion, Tying Odysseus to the Mast: Evidence from a Commitment Savings Product in the Philippines helps us understand the behavior patterns of the participants in the study. The study shows the difference in commitment to the savings of the participants of the study. The people represent the entire society in terms of embracing savings. All the steps of research were followed in the study making the findings of the study reliable.

Bibliography

Ashraf, Nava, Dean Karlan, and Wesley Yin. "Tying Odysseus to the mast: Evidence from a commitment savings product in the Philippines." The Quarterly Journal of Economics 121, no. 2 (2006): 635-672.