Improving Debt Management Plan Outcomes through Behavioral Interventions

In a recent project with ICMM, the Center for Economic and Social Research developed and fielded a survey measuring the prevalence of five behavioral factors that are likely to influence DMP outcomes (present bias, limited attention, locus of control, feeling overwhelmed, and income/expense mismatch) among new DMP participants across three Credit Counseling Agencies.  They found that behavioral characteristics are prevalent among DMP clients – 91% of respondents to the survey exhibited at least one of the elicited behavioral characteristics.  Limited attention, a feeling of being overwhelmed, and difficulties in living paycheck-to-paycheck were particularly common among our survey respondents.  Building on the survey results, and insights from the behavioral economics literature, they developed five behavioral intervention ideas designed to improve repayment behavior and increase DMP retention.  Four of the ideas were well received by prospective implementing partners:

  1. Early Reminders of Upcoming DMP Payments
  2. Reducing Income/Expense Timing Mismatch with Careful Repayment Dates
  3. Peer Reference Points
  4. DMP Bank Accounts



Year 1

  • Match interventions to the most suited implementing partner (and recruit the fourth implementing partner with assistance from ICMM),
  • Finalize the design of each intervention in collaboration with the selected implementing partner,
  • Develop an associated plan for implementation,
  • Secure approval for human subjects research from USC’s Institutional Review Board, and
  • Oversee the execution of the implementation plan.

Year 2

  • Work in partnership with ICMM to collect the relevant data,
  • Analyze the results of each of the four interventions,
  • Disseminate results of the research, and,
  • Document the results of the experiments in a research report.