| Project/Area Number |
23K12500
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| Research Category |
Grant-in-Aid for Early-Career Scientists
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| Allocation Type | Multi-year Fund |
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| Review Section |
Basic Section 07060:Money and finance-related
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| Research Institution | Hitotsubashi University |
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Principal Investigator |
Umer Hamza 一橋大学, 社会科学高等研究院, 特任講師 (00972746)
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| Project Period (FY) |
2023-04-01 – 2025-03-31
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| Project Status |
Granted (Fiscal Year 2023)
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| Budget Amount *help |
¥1,300,000 (Direct Cost: ¥1,000,000、Indirect Cost: ¥300,000)
Fiscal Year 2024: ¥650,000 (Direct Cost: ¥500,000、Indirect Cost: ¥150,000)
Fiscal Year 2023: ¥650,000 (Direct Cost: ¥500,000、Indirect Cost: ¥150,000)
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| Keywords | religious nudging / Islamic loan / profit and loss sharing / loan repayment / Islam / Islamic banking / Quran / Islamic bank / Islamic finance / Profit and loss sharing / Framing / Pakistan |
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| Outline of Research at the Start |
The proposed research will use lab experiments with Muslim students in Pakistan to study whether distinct loan structure (profit-and-loss sharing loan) or religious orientation of the Islamic banks keeps their default rates relatively low.
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| Outline of Annual Research Achievements |
As per plan, lab experiments were conducted in Pakistan (3rd to 6th October, 2023) with 200 students (198 usable observations) to examine the influence of religion on the Islamic loan's repayment rate. The main finding is that religious nudging (done via a brief Quranic passage) significantly increases loan repayment rate (94% repayment rate) as compared to the baseline scenario (69% repayment rate), Islamic frame without Quranic passage (58% repayment rate) and conventional frame (70% repayment rate). The findings highlight the effectiveness of using religious nudging (non-monetary intervention) to enhance loan's repayment rate in Pakistan. The initial draft of the paper is completed, and abstract is submitted to a behavioral economics conference scheduled in Scotland in August this year.
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| Current Status of Research Progress |
Current Status of Research Progress
2: Research has progressed on the whole more than it was originally planned.
Reason
The data collection went very smoothly. The data analysis and paper writing activities are completed as per the initial plan.
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| Strategy for Future Research Activity |
The abstract of the paper is submitted to the SABE conference (Society for the Advancement of Behavioral Economics) scheduled to take place in Scotland in August this year. I will travel to Scotland to present the paper, obtain feedback, and incorporate it in the paper. Afterwards, it will be submitted to The Review of Economic Studies.
Using data from post experiment surveys, I will finish one more paper that will study ordering effects under random payment. The purpose of this paper is to reveal whether ordering effects in decisions persist when randomly one of the multiple decisions is selected for payment. The findings will offer important insights that will be useful for designing future lab experiments.
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