Clean Water in Northern Ghana

This study assesses the willingness of households in Northern Ghana to purchase a ceramic water filter. The Kosim filter is sold by Pure Home Water (PHW), a Ghana-based NGO, and has been demonstrated to be highly effective at improving water quality without needing electricity. We will also measure the health effects of household-level water treatment in areas with high waterborne disease loads.  

Policy Issue: 

Diarrheal diseases, which result poor water quality, are a leading cause of death in the developing world, killing approximately 1.8 million people per year. Achieving the Millennium Development Goals of reducing the proportion of people without sustainable access to safe drinking water is especially difficult for the rural poor. Delivering treated water through pipes has resulted in sustained health gains in developed countries and urban areas in developing countries, but is not considered feasible in rural areas with dispersed populations and weak institutions for maintenance. Community interventions, such as spring improvement or communal wells, have not produced strong results, and policy makers are increasingly interested in household and point of use treatments. However, the effectiveness of such treatments in rural environments, the role of education and marketing to encourage use, and how to expand access with limited resources remain largely unknown.

Context of the Evaluation: 

Diarrheal diseases account for 12% of childhood deaths in Ghana, and are the third largest cause of death for children under the age of 5. These diseases are caused by the ingestion of water contaminated by fecal matter, and 20% of Ghana’s population does not use an improved water source. The sparsely populated northern region of Ghana is one of the least developed parts of the country, and has even less access to clean water than the national statistics would suggest. The majority of its residents make their living in agriculture, living far away from one another. This low population density makes any state- or community-wide water treatment intervention costly and impractical.

Details of the Intervention: 

This study will evaluate the demand, use, and impacts of one household level water treatment technology. The Kosim filter is a ceramic filter marketed and sold by Pure Home Water, a Ghana-based NGO. This simple product has been proven to be highly effective at improving water quality and is appropriate for the region, since it removes particles and pathogens from water without the use of chemicals or electricity which require some form of delivery.

Researchers are measuring the willingness to pay of households for the Kosim filter by offering a random selection of households the opportunity to purchase the filter through door-to-door sales. Households will also be offered a randomized price for the filter, to determine price effects and willingness to pay for preventive health technologies.

Researchers will collect data from 1,500 households on water quality, education, income, consumption, health, diarrhea disease knowledge and water treatment and storage practices to see how these variables affect the willingness to pay for a filter. The randomized offer price provides a means to estimate the filter’s health impact and health spillovers among neighbors, without letting a set price screen out households who have a lower value for clean water. Thus, researchers can evaluate different techniques for creating behavioral change, such as the adoption of new water treatment technologies and storage techniques, and the propensity of individuals to drink treated water and provide treated water to their children.

Results and Policy Lessons: 

Forthcoming

[1] As of 2004. WHO, “The Top Ten Leading Causes of Death” (accessed Nov. 6, 2009)

[2] WHO, “Mortality Country Fact Sheet 2006, Ghana.” (accessed Nov. 6 2009)

[3] United Nations, Human Development Report 2009 "Ghana" (accessed Nov. 6, 2009)

Jim Berry, Greg Fischer, Raymond Guiteras

Before and After Comparison of Innovative Mobile Applications for Micro Retailers in Colombia

Policy Issue:

Without a system for managing finances, small businesses may miss opportunities to increase profits and trim expenses. In particular, entrepreneurs in developing countries who rely on informal businesses to meet basic consumption needs may benefit from formal record keeping systems. Many of these entrepreneurs, often with little formal education and low levels of financial literacy, do not maintain records of business expenses or sales.  Providing small business owners with tools to manage their finances may be a way to improve both business outcomes and household consumption levels.

For additional information on current SME Initiative projects, click here.

Context of the Evaluation:

Colombia has an estimated 400,000 micro and small stores or "tiendas”[1]. In Colombia, these retailers comprise 52% of food and retail  sales.[2] While tienda entrepreneurs sell hundreds of different products, and have managed to keep contact with wholesalers, most continue to use unsophisticated business administration tools (writing down sales and purchases on notebooks) or none at all. Colombia also has one of the most penetrated information communication and technology (ICTs) markets: there are 92.3 cell phone subscriptions per 100 people, and 45.5% of the population uses the internet[3].

Frogtek, a firm specialized in creating business tools for entrepreneurs in emerging markets, identified that a major challenge for micro-retailers was managing their perishable inventories and figuring out how often they would need to restock them.  While several non-governmental programs have tried to address these issues through financial education and literacy training programs, shopkeepers continue to use unsophisticated methods, or none, and cannot easily determine the size of their inventory or actual profits.

Description of Intervention:

To address these challenges, Frogtek created “Tiendatek”, a smart phone application to help shopkeepers systematize their business by managing their accounting, inventories, sales, payments to suppliers, expenses and earnings. The tool is distributed through personal sales associates who visit the shopkeepers, demonstrate the product, and provide training on its use during the length of the pilot. All data generated by the shopkeeper is uploaded and stored on a Frogtek web server. Additionally the Tiendatek application creates simple and advance reports on sales, purchases, credit, inventory, and break-even points based on the data uploaded by the user.

This study pilot targeted clients of a microfinance institution, Bancamía, who are shopkeepers with sales of about 4.5 million COP (about 2500 USD) a month. Frogtek staff interviewed the candidates, assessed their interest, delivered the phone and provided training in one or two visits. Fifty participants were selected to receive a baseline survey approximately ten to twenty days after receiving the new phone and an endline survey, eight to ten months after the initial phone delivery.  Shopkeepers participating in the pilot received a phone, charger, SIM card with data access, and a TiendaTek manual free of charge. Those shopkeepers who become frequent users of the application by the end of the study, will be able to keep the phone and receive a three month data plan.  By collecting data on the use of the application, store production, sales, satisfaction, and perceived improvements, this comparative study will assess the use of Tiendatek, possibly for further analysis in a randomized evaluation.

Results and Policy Lessons:

Results forthcoming.
 

 

[1]Diaz, Alejandro, Jorge Lacayo, and Luis Salcedo. 2007. ”Selling to ‘mom-and-pop’ stores in emerging markets” The McKinsey Quarterly,

[2]De Jacobs, Alicia. “Colombia Retail Food Sector” USDA Foreign Agricultural Services Global Agricultural Information Network Report, October 2010.

[3]United Nations Conference on Trade and Development 2010 Information Economy Report

Antoinette Schoar

Improving Immunization Rates Through Regular Camps and Incentives in India

Every year 2 to 3 million people die from diseases which could be prevented by existing vaccines. In India, immunization services are offered free in public facilities, but the immunization rate remains low. This study found that offering families small, non-financial incentives in addition to reliable services and education is a cost-effective method of increasing uptake of vaccinations.

Policy Issue:

Immunization is a highly cost-effective way of improving child survival, however, every year an estimated 2 to 3 million people die from vaccine-preventable diseases. High absenteeism rates among healthcare providers and unreliable supplies of vaccines may contribute to low vaccination rates in many developing countries. A lack of understanding of the benefits of vaccination or even a suspicion of government health services have been raised as possible contributing factors. Conditional cash transfers have been found to be effective in raising immunization rates, but these programs are very expensive and have mainly been tested in areas where health services are relatively well functioning. Can relatively small incentives have a big impact on immunization rates or — when immunization rates are very low — is the hostility too deeply rooted to be impacted by a small incentives? How much of the problem is just unreliable supply?

Context of the Evaluation:

In India, immunization services are offered free in public health facilities, but the immunization rate remains low. According to the National Family Health survey, only 44% of children aged 1-2 years old have received the basic package of immunizations. That rate drops to 22% in rural Rajasthan, and the data are likely to overstate immunization rates. Careful probing found only 2% of children had received the full package of immunizations in mostly tribal villages in rural Udaipur district.

The public facilities serving these areas are characterized by high absenteeism: 45% of health staff who carry out immunizations (Auxiliary Nurse Midwives, or ANMs) are absent from their village-level health center (and could not be found anywhere in the village) on any given workday, with no predictable pattern to their absences. Given that a full immunization course requires at least five visits to a public health facility, the unreliability of the ANMs increases the opportunity cost of a visit to the sub-center and may deter families from taking their children to complete their full immunization schedule.

Details of the Intervention: 

This study assesses the relative efficacy and cost-effectiveness of improving the supply of infrastructure for immunization, and improving supply and simultaneously increasing demand through the use of modest, non-cash incentives. Two interventions were evaluated in rural Udaipur, and a third set of randomly selected villages served as the comparison group.

  • Intervention A:  Seva Mandir (a local NGO) hired a mobile immunization team including an ANM and assistant to conduct monthly immunization camps in villages. The camps were held from 11am - 2pm on a fixed date of the month and the presence of the ANM was verified by timed and dated photographs of them in the villages, as well as regular monitoring. Records indicate that 95% of planned camps took place, and were not disrupted by provider absence. A Seva Mandir social worker who lived in each village informed mothers of immunization camp availability and educated them on the benefits of immunization. The vaccine package administered was the WHO/UNICEF Extended Package of Immunization (EPI), which is the package provided by the Indian government. At the first immunization, every child was given an official immunization card indicating name, parent’s name, and the date and type of each immunization performed. When a child arrived at a camp without an immunization card and it could not be ascertained whether they had received a given immunization, he or she was immunized.
  • Intervention B: Using the same immunization camp infrastructure as intervention A, intervention B also offered parents 1 kg of lentils per immunization administered, and a set of thalis (metal meal plates) upon completion of a child’s full immunization course. The value of the lentils was about Rs. 40 (less than one dollar), equivalent to three quarters of one day’s wage. The incentives were provided as an agent to help offset the opportunity cost of taking a child to be vaccinated. Compliance with the full course of immunizations was verified by the child’s health card.
Results and Policy Lessons:

Incidence of full immunization (child received 5+ vaccinations): Among children aged 1-3 years, 38.3% were fully immunized in intervention B villages, compared to 16.6% in intervention A villages, and 6.2% in control villages. A child was 6.19 times as likely to be completely immunized in intervention B villages as in control villages, and 2.69 times as likely to be immunized in intervention A villages relative to control villages. 
Children in areas neighboring intervention B villages are also more likely to be fully immunized relative to those in areas adjacent to intervention A villages (20% vs. 10%), suggesting that reliable camps with incentives also prompted parents from farther away to get their children immunized.

Study results indicate that offering families in resource-poor settings small, non-financial incentives in addition to reliable services and education is more effective than providing services and education alone. It is also more cost effective—more children utilize immunization facilities, lowering the cost per child immunized, even considering the cost of the incentives. The average cost per child completely vaccinated was $27.94 in intervention B villages, relative to $55.83 in intervention A villages.

Abhijit Banerjee, Esther Duflo, Rachel Glennerster

Reducing Barriers to Saving in Malawi

On average, developing countries have fewer than 20 bank branches per 100,000 adults, and people deposit money at a rate one-third of that in developed countries.[i] This lack of formal financial services, along with many other factors, may inhibit farmers and other entrepreneurs, particularly in rural areas, from increasing savings and investments, and smoothing household consumption. Financial services could help farmers to accumulate funds to purchase tools such as fertilizer which are helpful for increasing production. If barriers to financial services are reduced or eliminated by offering enhanced savings products, what is the impact on the use of different agricultural inputs, farm output, and overall well-being in rural farming households?

Context:

Tobacco is one of Malawi’s primary exports, employing many of the country’s farmers. Income volatility influenced by macroeconomic forces can be particularly harmful to those farmers living near the poverty line, causing households to skip meals and forgo necessary healthcare expenses.

Opportunity International, an international NGO, opened the Opportunity Bank of Malawi (OBM) in 2002 with a license from the Central Bank of Malawi. OBM provides financial services to the rural poor and has partnered with researchers and two private agricultural buyers, Alliance One and Limbe Leaf, to offer enhanced savings products to tobacco farmers.

Description of Intervention:

The study assessed the impact of OBM’s savings programs on the behavior and well-being of local farmers. Farmers were organized in farmers clubs, with an average of 10-15 members, by one of the agricultural buyers. In exchange for group loans in the form of fertilizer and extension services, administered by OBM, the club allowed the commercial buyer to make the first offer on the national auction floor, essentially creating an exclusive relationship. Farmer clubs in this sample were randomly assigned to one of two savings account treatment groups or a comparison group. Clubs in the comparison group received information about the benefits of having a formal savings account. Clubs in the treatment groups received the same information about savings accounts and were also offered individual savings accounts into which proceeds, after loan repayment, would be directly deposited.

Farmers in the first treatment group were offered an “ordinary” savings account with an annual interest rate of 2.5%. Those in the second treatment group received the same individual savings account, in addition to a “commitment” savings account which allows farmers to specify an amount of money to be frozen until a specified date (e.g. immediately prior to the planting season, so that funds are preserved for farm input purchases).

To assess the impact of public information on financial behavior, farmer clubs in both treatment groups were randomly assigned to one of three raffle schemes providing information about club level savings. Raffle tickets to win a bicycle were distributed to participants on two occasions based on savings balances as of two pre-announced dates. One third of farmers received raffle tickets in private, one third received tickets in public when names and numbers of tickets were announced to the club, and one third was ineligible for the raffle.

Results:

Savings Behavior:Twenty-one percent of farmers who were offered a commitment savings product (no raffle), made transfers to their account, while 16% of farmers who were offered the ordinary savings product (no raffle) had their harvest proceeds directly deposited into their individual account, and no farmers in the comparison groups received funds directly in an OBM account. Overall, farmers in the six treatment groups deposited substantial amounts into their individual bank accounts; among farmers who were offered the commitment savings account, most of these deposits were made into the ordinary savings account.

Farmers in the commitment savings group had higher net savings during the pre-planting period, and the commitment savings treatment group overall withdrew more money during the planting season. This finding implies that these farmers were better able to save money and delay consumption until the lean season when food supplies from the last harvest were scarcer. Farmers in the ordinary savings group did not experience an increase in net savings during the pre-planting season, or an increase in withdrawals during the planting season, suggesting they were not able to smooth consumption as effectively.

Inputs, crop sales, and expenditures: In relation to those in the comparison group, farmers who were offered commitment savings accounts had more land cultivated, higher value of inputs, and greater value of harvest at a statistically significant level. These commitment savings farmers cultivated .42 more acres of land (compared to an average of 4.3 acres of land in the comparison group) and used 26% more inputs. This increase in land under cultivation and inputs used by the commitment savings group led to a 22% increase in value of crop output above the levels in the comparison group. Finally, farmers in the commitment treatment group increased total expenditures reported in the last 30 days by 17%. Overall, farmers in the ordinary savings group did not have outcomes that were different from those in the comparison group at a statistically significant level.

Evidence suggests that the positive results in the commitment savings group were not due to helping farmers solve self-control problems since most money accrued in ordinary savings accounts and actual commitment account balances were low. There was also no direct evidence that the results were derived from farmers keeping funds from their social networks. Psychological phenomena such as mental accounting may be behind the impact of the commitment accounts. However, the current study does not empirically test this hypothesis and psychological mechanisms are addressed in future research. Results from the public and private raffle treatments were inconclusive.

 

[i]Consultative Group to Assist the Poor/The World Bank, “Financial Access 2009:  Measuring Access to Financial Services around the World,” http://www.cgap.org/gm/document-1.9.38735/FA2009.pdf(Accessed January 9, 2011).

For more details, see the Gates Foundation briefing note on this project.

Xavier Giné, Jessica Goldberg, Dean Yang

Examining Underinvestment in Agriculture: Returns to Capital and Insurance Among Farmers in Ghana

Risk, rather than a lack of capital, appears to drive underinvestment in agriculture in Northern Ghana, but when farmers were provided with weather insurance they spent more on inputs such as chemicals, land preparation, and labor.

Policy Issues:

Underinvestment in agricultural inputs such as fertilizer, hybrid seeds, or labor is thought to drive low crop yields in Africa and other parts of the developing world. Several factors may help explain why farmers fail to invest in such potentially profitable inputs. It is possible that they are wary of the riskiness of adopting new agricultural methods or tools—if they invest and their crops still fail, they will have even less money than if they had not invested at all. Farmers may also lack the capital necessary to purchase these inputs, and be unable to obtain credit to finance investment in their farms. Because the returns to using new technologies can be so high, encouraging use among farmers has the potential to greatly improve their welfare, but financial institutions and policymakers need to first understand what factors are truly driving underinvestment in agriculture.

Context:

The climate of northern Ghana’s savannah region has a single short wet season, with high annual variation in rainfall. This kind of weather pattern creates great risk for farmers who depend on the weather for their livelihood, particularly when agriculture is primarily rain-fed, as it is in this area. There is strong evidence that shocks in the amount of rainfall translate directly into consumption fluctuations for farmers, and so investment in new agricultural technologies or methods has the potential to significantly affect welfare. Throughout Ghana, the average farmer uses only 7.4 kg of fertilizer per hectare, while in South Asia fertilizer use averages more than 100 kg per hectare. Initial surveys in northern Ghana revealed that the median farmer participating in this study did not use any chemical inputs on their crops, often citing lack of money or concerns regarding weather risk as key obstacles preventing investment.

Description of the Intervention:

In the first year of the study, researchers tested the relative importance of capital and risk in driving farmers’ investment behavior. From a total of 502 households, 117 were randomly selected to receive a cash grant to fund agricultural inputs; these farmers received GHC 60 (approximately US$45) per acre for up to 15 acres, delivered at a time of their choosing. Another 135 randomly selected households received a grant for an insurance scheme that paid roughly GHC 100 (US$75) per acre of maize if rainfall at a local weather station went above or below specified thresholds. Ninety-five households received both the cash grant and the insurance grant, while 155 households received no additional services and formed the comparison group.

In the second year, researchers tested different prices for rainfall insurance among the original sample households, plus households in an additional twelve communities. Households were visited up to four times by marketers: during the first visit they were informed about the product, during the second visit they were asked to sign the contract and pay premiums, during the third visit the marketer issued a policyholder certificate, and during a fourth visit an auditor verified their understanding of the product. The price that people were offered for insurance was randomly assigned at the community level: households in the original sample would be offered rainfall insurance at a cost of either 1 GHC or 4 GHC (approximately US$0.75 or US$3), while in the newly added communities, households would be offered insurance at either the market price of GHC 12-14, or the actuarially fair price of GHC 8-9.5.

In year three, the pricing experiment continued in collaboration with the Ghana Agricultural Insurance Programme (GAIP), to market their drought-indexed insurance. Because this product was more complex, scripts used at the four marketing visits were updated to make it more understandable. Pricing of the insurance was again randomized at the community level, with 23 communities receiving the market price, 23 communities receiving the actuarially fair price, and 26 communities receiving a subsidized price.

Results:

Importance of Capital vs. Risk: Results from the first year suggest that risk, rather than capital, was the major constraint on investment among farmers in this sample. Farmers who received the insurance grant increased their expenditure on farm chemicals, and also brought more acres of land under cultivation. If the primary constraint on investment was a lack of capital, then the insurance product, which offered no up-front payouts, would not have affected their ability to purchase materials. Many farmers appeared to recognize the value of the insurance product, with a significant proportion choosing to purchase insurance in years two and three. Take-up of the insurance product did not change when a token price of GHC 1 per acre was charged, and even at the actuarially fair price of almost GHC 10 per acre, 40-50 percent of farmers purchased insurance.

Impacts of Weather Insurance: Farmers with weather insurance invested more in agricultural inputs, particularly in chemicals, land preparation, and hired labor. Total cultivation expenditures were more than GHC 250 (US$188) higher for farmers with insurance, representing a 33 percent increase relative to the comparison group. These impacts were even larger among farmers who received both insurance and a capital grant. Despite the increases in production, it is not clear that investments were actually profitable for farmers: the additional expenditures may have increased by more than the value of the additional output, depending on how household labor is valued.

Trustworthiness of Insurance: Results suggest that how much farmers trust the insurance scheme has a large impact on their take-up and response to rainfall insurance. Take-up of insurance was considerably higher among farmers who also received a capital grant, but it was not higher among households who were wealthier. This suggests that farmers might not have been entirely confident that the promised insurance payouts would be made when trigger events occurred, and so they were more willing to take the risk of purchasing when they had been given extra cash. Similarly, individuals who were familiar with others who had received insurance payouts in previous years were significantly more likely to take-up insurance themselves.

Click here for a Q&A with researcher Chris Udry

Read about the new agricultural insurance product launch as a result of this study here, and about its' 2012 payout to farmers here.

Dean Karlan, Robert Osei, Isaac Osei-Akoto, Christopher Udry

Market Structuring of Sludge Management for the Benefit of Vulnerable Households in Dakar

Poor sanitation in the developing world leads to childhood diarrhea, a leading cause of mortality in children under five.1 This project seeks to identify ways to increase demand and reduce prices for an improved sanitation technology, mechanical desludging. Researchers are measuring the effects of social and behavioral factors (social pressure, learning, and payment formats) on household demand, and the effect of different auction mechanisms on collusion and prices paid by consumers.

Policy Issue:
In urban areas of developing countries where houses are not connected to publicly-provided sewer systems, a household’s waste goes into its own septic tank or unimproved pit, which then has to be emptied, or “desludged.” A household can either pay to have the pits shoveled out manually, which often means dumping it near adjacent homes, posing health hazards to both workers and residents, or hire a mechanized desludger which pumps the sludge into a truck that then delivers the sludge to a treatment plant. Mechanized desludgers are more expensive, but also more sanitary. Because they are often underutilized, research is needed to better understand how to increase demand and decrease prices for these services.
 
Context of the Intervention:
In Dakar, Senegal, waste pits fill on average every six months, but only an estimated 30 percent of households use mechanized desludging because of the expense. Estimates suggest that a mechanized desludging costs approximately five days’ wages while a “baay pelle” (a worker who shovels the pit manually) costs approximately two days’ wages. The Office National de l’Assainissement du Senegal (ONAS), part of the Senegalese Ministry of Sanitation, is seeking to identify ways to boost usage of the more expensive, but more sanitary, mechanized desludging.
 
Details of the Intervention:
This project seeks to understand how to increase use of mechanized desludging, from both the demand (customer) side and supply (provider) side. 
 
Demand Side Interventions:
Four thousand households will be randomly assigned to receive a discount of either 10 or 50 percent on mechanized desludging services. To understand the extent to which social pressure influences use of mechanized desludging, this discount will be made by public lottery for half of the households, and for the other half it will be offered privately. A further 800 households will be surveyed to evaluate the effects on those nearby who were not offered subsidized mechanized desludgings.
 
The impacts of learning from others and coordination will be measured when 100 randomly chosen households are told either how many or specifically which of their neighbors have signed up, and are then given the opportunity to sign up. To measure learning from doing, researchers will see whether those who received subsidized services continue after the discount ends. 
 
A number of payment structures will also be tested. Eighty percent of households will be asked to leave a deposit at the time of the survey if they would like to sign up for the subsidized mechanized desludging. One third of households will be asked to pay the remainder at the time of service, one third will be given a savings account earmarked for desludging and billed monthly, and one third will be given the same earmarked savings account, but allowed to contribute whenever they wish. Half of households will also be offered a general, non-earmarked savings account. Varying the frequency of payments and savings options will test the relative importance of commitments and mental accounting to encourage payment and usage.
 
Supply Side Interventions:
Anecdotal evidence suggests that desludging firms discuss prices among themselves and coordinate pricing for the different neighborhoods of the region. A new call center, developed by the researchers together with ONAS and the NGO Water and Sanitation for Africa (WSA), will handle contracting of desludging jobs for households in the study. When households are ready for desludging, they can call the center and desludging truckers will bid on their job using text messages. The new call center will allow researchers to test whether changing the auction mechanism can lower pricing for customers. Jobs will be assigned randomly to either an open auction, with the current lowest bid and firm name sent out by text message every 15 minutes, or a sealed bid format, where bidders compete anonymously. This randomization will test if either bidding strategy leads to lower prices than the current system, which involves customers negotiating individually with truckers.
 
This call-in center will not only be available to those households participating in the demand-side interventions; it will also be available to households across Dakar, with a geographic roll-out over time. Together with WSA, researchers are surveying an additional 4,000 households in baseline, midline, and endline surveys to estimate the impact of the roll out of the call-in center on the general unsubsidized population. These households will be far enough away from the demand-side households that they should not be affected by the subsidies offered to those households. Researchers are also surveying all 150 sanitation truckers in the Dakar area.
 
Results and Policy Lessons:
Results forthcoming
 
 
World Health Organization. 2009. “Fact sheet N°330: Diarrhoeal disease.” http://www.who.int/mediacentre/factsheets/fs330/en/index.html.

 

Jean-François Houde, Molly Lipscomb, Laura Schechter

Environmental Investments on Private Land: Planting Trees in Chipata

Policy Issue:

Financing for carbon offset investments is growing quickly. The voluntary market for carbon offsets traded over 700 million dollars worth of emissions reductions in 2008, a third of which came from land use projects.[1]  These investments have the potential to benefit smallholder farmers, not only by creating revenue from selling carbon credits, but also by incentivizing more climate-resilient agricultural practices and technologies to increase production. Many climate change programs that target smallholder farmers seek to modify current agricultural practices, whether to sequester additional carbon or to improve climate resiliency. Because these changes often impose costs on the farmer, many programs provide upfront inputs or incentives for adopting and complying with the program’s objectives.

However, in spite of a growing number of NGO- and government-led adaptation and climate resilience projects, farmer adoption remains a challenge and concerns persist due to the high cost of inputs, training and monitoring in comparison to the value of the credits earned from sequestered carbon. A more rigorous understanding of the relationship between input costs, compliance incentives and program outcomes may help improve the success and cost effectiveness of both carbon offsets and climate resiliency programs. To date, none of the numerous programs that offer landholders inputs or performance payments have systematically varied contract design to generate causal evidence on the determinants of program success.   This study proposes address this knowledge gap in the context of a program promoting fertilizer trees in Eastern Zambia.

The project implementation is designed to allow the researchers to investigate (a) the role of option value in shaping farmer decisions, and (b) the effect of cost sharing and performance incentives on selection into the project and on long-run performance under the contract.

Context:

The partner organization, Mitengo Zambia promotes a fertilizer tree (Faidherbia albida), locally known as the masangu tree, both for its carbon sequestration potential and its ability to help farmers adapt to a changing climate.  Faidherbia fixes nitrogen in its leaves, providing benefits to farmers, including better soil fertility, maize yields and resilience to climate change. To grow the tree, seedlings must be purchased and raised, and then planted among low growing crops, weeded and watered. These adoption costs are highest in the first year and tree survival is low.

Mitengo Zambia  has partnered with Dunavant Cotton to investigate the carbon sequestration and soil fertility potential of encouraging agroforestry adoption among Dunavant farmers. Findings from the research phase will be incorporated in program scale-up with Dunavant Zambia Limited, a leading cotton ginning company in Zambia.

Description of the Intervention:

Around 2,000 outgrower farmers associated with Dunavant cotton in Chipata, Eastern Province, Zambia receive training and subsidized inputs (seedlings) for growing Faidherbia on their land. Most Dunavant farmers produce on a small-scale, with a mean landholding size in the study sample of around one hectare, and have access to loans for cotton inputs from Dunavant.  The company organizes the farmers into groups of approximately 15 geographically clustered farmers. Each group has one lead farmer who, under the Dunavant system, is responsible for training his farmer group on cotton production and, under the Mitengo Zambia program, on Faidherbia planting and management.  

Lead farmers organize trainings on Faidherbia for their groups of farmers, which are attended by Mitengo Zambia and IPA staff who assist with administration of the treatments and the baseline survey.

After their training, farmers decide whether to join the program based on two factors:

(1) Variation in input prices – Farmer groups will be randomly assigned to receive one of four input prices that range from fully subsidized (free) to the cost-recovery price for the implementing organization (approximately $2.50 US). A transport allowance (of $2.50), provided to the farmers to remunerate any transportation costs of attending the lead farmer's training, ensures that farmers have enough cash to make a participation decision based on willingness to pay, not on liquidity constraints. Variation in input prices allows researchers to test hypotheses on risk and on cost-sharing. Specifically, how the probability of take-up changes as the input prices increase, controlling for individual characteristics and incentives, will be assessed.

(2) Variation in incentives – Individuals will be randomly assigned to receive different levels of incentive pay, which farmers are informed of either before or after making their take-up decision. The range of incentives is based on project pilots from the previous year, which ranged from $0 - $30 (0 - 150,000 ZMK). The use of scratch-off cards to reveal the incentives ensures that incentives cannot be manipulated and that the variation is perceived as fair by the participants.  Incentives will be paid after one year, conditional on 70% tree survival.  All farmers received 50 seedlings. The variation in incentives will allow researchers to test the causal effect of incentives, by comparing the probability of take-up and the rate of tree survival for farmers at different incentive levels, controlling for individual characteristics.

At the time of training, farmers receive a detailed baseline household questionnaire that includes modules on demographics, socioeconomic status, agriculture and environmental knowledge. The survey is administered to all farmers who attend the training, regardless of their decision to participate. One year after contracts are initiated, all participating farmers will be visited and the number of surviving trees recorded, an incentive payments delivered on the basis of tree survival.

Results:

Summary results forthcoming.

See more information including detailed findings from an in-country event with cross-sector stakeholders from the Zambian government, private sector, international donor and research community, and leading non-governmental organizations here.

 

[1]Conte, M. and M. Kotchen. Explaining the price of voluntary carbon offsets. Working Paper. (2009)

 

 

Elizabeth Walker, Samuel Bell, Kelsey Jack, Paulina Oliva

Understanding Technology Adoption: Fertilizer in Kenya

Why do so few people use fertilizer even though it can considerably improve yields? This project measures the increase in yield due to fertilizer and hybrid seed use in Western Kenya. It found that fertilizer is profitable, and providing information goes part of the way towards increasing fertilizer adoption. Programs that help farmers commit when they have money to use fertilizer in the future have a very large impact on fertilizer adoption. 

Policy Issue:

By some estimates, approximately 1.4 billion people lived on less than $1.25 a day in 2005, and many of the poor are farmers. Identifying ways to increase agricultural incomes is crucial to alleviating poverty. Such strategies are especially important in sub-Saharan Africa, a region that has suffered decades of decline in per capita food production.

Context of the Evaluation: 

An estimated 50 percent of the population of Kenya’s Western Province lived below the poverty line around the time of this study, which often means they are unable to afford enough food to meet their basic calorie requirements as well as their non-food needs.The majority of Kenyan subsistence farmers grow maize as their staple crop, but many have only small amounts of land and are actually net buyers of maize, purchasing it when their own supply runs out immediately before a harvest. In such an environment, improving agricultural productivity could substantially benefit the farmers’ livelihoods. A potentially important input into increasing productivity is chemical fertilizer. Numerous agricultural trials on experimental farms suggest substantial returns to fertilizer, and improved fertilizer use has been associated with the increase in agricultural incomes during the Green Revolution in South Asia. However, only 37 percent of sampled farmers in the Busia district of Western Kenya report ever having used fertilizer. 

The overall goal of this research program is to understand why farmers do not invest in fertilizer. This part of the project first investigates whether the returns to fertilizer are actually substantial on real-world farms in real conditions.

Details of the Intervention:

In collaboration with International Child Support (ICS), an NGO, researchers set out to experimentally measure the returns to fertilizer amont area farmers. Farmers were selected from lists of parents at local schools, and ICS paid for fertilizer and hybrid seeds, delivered materials, helped these farmers apply fertilizer and seeds, and assisted them with the harvest. On each farm, a comparison plot was kept directly next to treatment plots, which was farmed using traditional methods. The type of seed and amount of fertilizer applied to each plant was varied by plot (see below), but farmers were instructed to tend all plots exactly the same.

Group

Fertilizer/Seed
Combination

Time of Application

# of Plots

A

¼ tsp Calcium Ammonium Nitrate

2 months after planting

112

B

½ tsp Calcium Ammonium Nitrate

2 months after planting

202

C

1 tsp Calcium Ammonium Nitrate

2 months after planting

274

D

Hybrid Seeds

1 tsp Di-Ammonium Phosphate

1 tsp Calcium Ammonium Nitrate

(the “full package” recommended by the Kenyan Ministry of
Agriculture)

At planting

At planting

2 months after planting

85

 

Results and Policy Lessons:

Impact on Crop Yield: All fertilizer treatments led to increases in yield, though in different amounts. Interventions A, B, and C led to yield increases of 28 percent, 48 percent and 63 percent respectively, relative to comparison plots. Intervention D, the Ministry of Agriculture recommended package, led to an average 91 percent increase in yield relative to comparison plots. These increases in yield are generally consistent with the results obtained in experimental farm trials.

Rates of Return:  Rate-of-return calculations suggest that Intervention B is highly profitable, with mean returns of 36 percent over a season and 69.5 percent annualized. Implementing Intervention B on a 0.93 acre area of maize cultivation (the average acreage under maize cultivation in this sample) would increase agricultural income net of fertilizer cost by about 1,100 Kenyan shillings (US$33 PPP) compared to traditional methods—this represents a 15 percent increase in net income and more than a month’s agricultural wages. This evidence demonstrates that fertilizer use can have substantial returns, even in the absence of any changes in other farming practices, on real-world farms. However, other levels of fertilizer use, including the official recommendations of the Ministry of Agriculture, are unprofitable for the average farmer in this sample. Thus, while fertilizer can be very profitable when used correctly, one reason why farmers may not use fertilizer is that the official recommendations are not adapted to their specific context. This also suggests that fertilizer is not necessarily easy to use correctly, and may not be profitable for many farmers who do not use the right quantity.

 

1 Shahua Chen and Martin Ravallion (2008). “The Developing World Is Poorer Than We Thought, But No Less Successful in the Fight against Poverty,” World Bank Policy Research Working Paper #4703.
2 National Coordinating Agency for Population and Development (NCAPD) [Kenya], Ministry of Health (MOH), Central Bureau of Statistics (CBS), ORC Macro. 2005. “Kenya Service Provision Assessment Survey 2004”. Nairobi, Kenya: National Coordinating Agency for Population and Development.

Selected Media Coverage:
Esther Duflo, Michael Kremer, Jonathan Robinson

Promoting Adoption of New Rice Varieties: Addressing the Costs of Early Adoption in Sierra Leone

Can improved seed varieties benefit poor farmers in Sierra Leone? Can price subsidies and agricultural extension training lessen the costs of early adoption?

Policy Issue:

Agricultural productivity has stagnated in much of sub-Saharan Africa, while many other regions of the world have seen dramatic productivity improvements in recent decades. New agricultural technologies, such as high-yielding crop varieties, offer the promise of improving productivity and hence the welfare of farmers. But adoption of these technologies has often been low in countries where dissemination programs have been conducted. First adopters of new technologies play an important role in the spread of technology as they take on the burden of experimentation—testing whether and how a new variety works in local conditions. This is particularly important in much of sub-Saharan Africa where a multiplicity of micro climates within a small area means that experimentation is essential for farmers to learn which crop varieties are best for their particular land. There is also concern that early subsidization to increase adoption of new technologies will lead to expectation of continued subsidies, depressing demand at market prices.

Details of the Intervention:

Researchers sought to test whether improved seeds are beneficial for the poor in Sierra Leone and how best to promote uptake given the high costs of early adoption. Early adopters generate a positive externality to surrounding farmers and communities by delivering information on the effectiveness of new varieties and how to make the most of them in local conditions.

Two types of incentives will be tested: (1) a price subsidy scheme allowing farmers to purchase new seeds at a price lower than the market price; and (2) targeted agricultural extension work involving community demonstration plots and practical advice on how to use these seeds. Two types of new seed varieties will be used in the intervention. The first is one of the NERICA varieties and the other is a local variety developed by the Rokupr station, ROK-16, which has proven popular in early participatory variety selection tests.

The first stage of the intervention will pilot the agricultural extension training and subsidy incentives. One treatment arm will receive free seeds and training, and take up and yields will be compared to a comparison group. In the second year, researchers plan to test a more complex set of alternatives involving six treatment arms, each with approximately 35 communities, under three different schemes:

Pricing Scheme:

  • T1: Farming households offered ROK-16 variety at 0 percent subsidy (market price).
  • T2: Farming households offered ROK-16 variety at 50 percent subsidy.
  • T3: Farming households offered ROK-16 variety at 100 percent subsidy (free).

Training Scheme:

  • T4: Farmers receive a targeted training program without a formal opportunity to purchase the new seeds.
  • T5: Farmers receive a targeted training program and are offered the chance to purchase ROK-16 seeds at one of the three subsidized prices.

NERICA Scheme:

  • T6: Farmers are offered one upland variety of NERICA rice (NERICA-6) for free (as is currently the practice of the government’s NERICA project) as well as the targeted training program.

The pricing scheme aims to test the hypothesis that a one-time subsidy can reduce the adoption cost for early-adopters and have a long-lasting effect both on the beneficiary and their neighbors. The training scheme aims to reduce the cost of learning by providing information on how well the seed works in the community (through a demonstration plot) and on how to cope with some of new features of the rice. Both ROK-16 and NERICA are included because there is little information on the relative productivity of each variety of seed in upland conditions.

Key outcome variables measured at endline include: (1) the amount of improved rice variety seeds (NERICA and ROK-16) purchased and planted; (2) planting of other rice varieties and other crops; (3) amount of family and hired labor used on the farm; (4) consumption and food security.

Results and Policy Lessons:

Study in implementation, results forthcoming.

Jeannie Annan, Rachel Glennerster, Tavneet Suri

Demand for Nontraditional Cookstoves in Bangladesh

Demand for nontraditional cookstoves in Bangladesh is very low. While women—who bear disproportionate responsibility for cooking—have stronger preferences for improved stoves, they lack the authority to make purchase decisions.

Policy Issue: 

One half of the world’s households, and 75 percent of people in South Asia, burn biomass fuels, such as wood, leaves, dung, and peat, for energy. The smoke released from using such fuels has been shown to lead to respiratory diseases and lung cancer, which disproportionately affects women, who are primarily responsible for cooking, and the young children they are caring for. According to the World Health Organization (WHO), indoor air pollution is the single largest risk factor for female mortality. Among the entire population, indoor air pollution is responsible for nearly two million deaths annually. In response, NGOs and governments have distributed tens of millions of “improved” or “clean” stoves, but the adoption and use of these nontraditional cookstoves in the developing world has, with few exceptions, remained extremely low.

Context:

Since the early 1980s, over 100 national and local organizations have developed and attempted to distribute a variety of nontraditional cookstove models tailored to the local needs in Bangladesh. Despite such efforts, 98 percent of the population in rural Bangladesh continues to cook with traditional biomass-burning stoves. A survey conducted in 2006 suggests that women in rural Bangladesh do not perceive indoor air pollution as a significant health hazard and subsequently prioritize other basic development needs over nontraditional cookstoves. When asked to rank the relative desirability of different attributes of nontraditional cookstoves, 47 percent of households cited the ability of nontraditional cookstoves to reduce fuel costs as their most valuable characteristic. The next most-valued attributes were the ability to reduce cooking time (21 percent) and to accommodate a wider variety of biomass fuels (14 percent). Only 9 percent of respondents answered that reducing or eliminating household smoke was the most valuable attribute.

Description of Intervention:

In order to explore households’ preferences, researchers designed two sets of overlapping experiments, both of which provided respondents an opportunity to purchase a nontraditional cookstove. In 2008, households in rural Bangladesh were randomly selected to receive basic health education about the harm of traditional cookstoves and the benefits of nontraditional cookstoves. Afterwards, they were given the opportunity to buy either an efficiency stove that improves fuel efficiency, or a chimney stove that reduces exposure to indoor smoke; the specific details of the offer varied by treatment group.

Each set of experiments was designed to evaluate the relative importance of two common explanations for the low adoption rates: (1) intrahousehold differences in preferences, and (2) lack of information from a trustworthy source about the new technology. For the first set of experiments, households were randomly assigned to one of the following treatment groups:

 

Group

Stove Offer

Offer Recipient

I

Choice of Free Chimney or Efficiency Stove

Husband

II

Choice of Free Chimney or Efficiency Stove

Wife

II

Choice of TK250 (US$3) Chimney or TK50 (US$0.61) Efficiency Stove

Husband

IV

Choice of TK250 (US$3) Chimney or TK50 (US$0.61) Efficiency Stove

Wife

A team of two enumerators visited each household. While one enumerator interviewed the male household head, the other conducted a separate interview with his wife. After completing the survey, either the husband or wife (depending on the treatment group) was given the opportunity to purchase either type of nontraditional cookstove, but was not able to consult with his/her spouse before making the decision.

The second set of experiments tested a common social marketing strategy for disseminating credible information about a new technology. Specifically, it paired random variation in prices and stove type with information about the purchase decisions of village “opinion leaders.” In selected village, within each distinct neighborhood, researchers identified three opinion leaders. These opinion leaders were the first to be offered stoves, and their adoption decisions were then announced in the village. The detailed breakdown of the treatment groups was as follows:

 

Group

Opinion Leader

Stove Type

Stove Price

V

No information

Chimney

Full (TK750, US$11)

Efficiency

Full (TK400, US$5.80)

VI

No information

Chimney

Half (TK375, US$2.44)

Efficiency

Half (TK200, US$4.57)

VII

Publicized adoption decisions

Chimney

Full (TK750, US$11)

Efficiency

Full (TK400, US$5.80)

VIII

Publicized adoption decisions

Chimney

Half (TK375, US$2.44)

Efficiency

Half (TK200, US$4.57)

Roughly four months after the orders were placed, project staff returned to deliver the cookstoves. At that time, households could refuse to install or pay for the stove.

Results:

Intrahousehold differences in preferences: Women seemed to exhibit a stronger preference than men for any improved stove, in particular for the health-saving chimney stoves. When the marketing offer was made to the wife rather than the husband, orders for the healthier chimney stove increased by 11.3 percentage points. This is consistent with the fact that the health cost of indoor smoke is greater for women. However, when a small positive price was charged for either stove, women became marginally less likely than men to order a stove. This may indicate that despite their preferences, women lack authority to make purchases.

During the initial offer, individual choices were kept hidden. However, in the intervening period between stove order and stove purchase, husbands and wives had the opportunity to learn about each other’s choices and preferences, more generally. During this time period, women's choices seemed to converge with their husbands. At the final purchase stage, any gender difference in stove orders had disappeared. Again, it seems as if women could not act on their preference for improved cookstoves when their choice could subsequently be undone by their husband.

Information dissemination:Receiving external information from opinion leaders seemed to matter more when the costs and benefits of technology were not readily apparent. Opinion leader influence on households’ purchase decisions was significantly less for chimney stoves, whose value in removing indoor smoke was apparent, than for efficiency stoves, whose combustion properties were much less obvious.

When the initial stove orders were made, there was very limited information about the new technologies available in the village except for the opinion leader purchase decisions. After orders were placed, the cookstoves were delivered over a period of several weeks and consequently, those receiving cookstoves later could learn from those who received deliveries early. Subsequently, the value of the information acquired from the opinion leaders' choices declined over time, even for efficiency stoves. These results suggest that social marketing programs—which often attempt to use opinion leader influence to increase the adoption of health technologies—are likely to be less effective in the long run as common experience with technologies grows.

Price effects: Reducing cookstove prices by 50 percent increased the number of orders and purchases of efficiency stoves by 25 and 11.6 percentage points, respectively. In contrast, orders for chimney stoves did not change significantly in response to changes in the price; the 50 percent subsidy only increased the order rate from 31.4 percent to 34.5 percent. Such marked differences in price elasticity suggest that in ordering stoves, households were less willing to trade off smoke emissions and health than they were the cook’s time and fuel costs.

 


[i] World Health Organization (WHO). Global Health Observatory. Available at http://www.who.int/gho/phe/indoor_air_pollution/burden_text/en/index.html.

 

Mushfiq Mobarak

Insurance, Credit, and Technology Adoption in Malawi

Policy Issue:

The classic economic view of poor farmers is that their lack of a savings cushion causes them to prefer agricultural approaches with more reliable, but lower average returns. Farmers may see adoption of new technologies as risky, especially early in the adoption process when proper use and average yields are not well-understood. Weather and environmental factors can also pose significant risks. Risk and uncertainty can lead to low levels of technology adoption, particularly where resources to help farmers deal with risk, such as insurance, are not available. However, few studies have evaluated whether providing insurance can increase adoption of profitable agricultural technologies.

Context of the Evaluation:

Nearly all Malawian households (97 percent in 2004-2005) are engaged in maize production, but only 58 percent use hybrid maize varieties. Hybrid maize adoption in Malawi has lagged behind adoption in Kenya, Zambia, and Zimbabwe. Aversion to risk, credit constraints and limited access to information are among the most cited reasons why hybrid seeds and other technologies have failed to take hold in Malawi. Within Malawi, varying rainfall risk is by far the dominant source of production risk in Malawi, followed by pests.

Description of Intervention:

Researchers conducted a randomized field experiment to determine whether bundling rainfall insurance with a credit program (intended to finance adoption of a new crop technology) increased demand for credit. Researchers randomly selected 16 localities in central Malawi where farmers were offered credit to purchase high-yielding hybrid maize and groundnut seeds for planting in the November 2006 crop season. In another 16 localities, farmers were offered a similar credit package, but if taking the loan were also required to purchase (at actuarially fair rates) a weather insurance policy that partially or fully forgave the loan in the event of poor rainfall.

The microfinance institutions Opportunity International Bank of Malawi (OIBM) and Malawi Rural Finance Corporation (MRFC) offered loans for the hybrid seeds based on group liability contracts for clubs of 10-20 farmers. Take-up of the loan was an individual decision, but the subset of farmers who took up the loan were told that they were jointly liable for each others’ loans.

The weather insurance policy was customized to each of the four project regions (Lilongwe North, Kasungu, Nkhotakota, and Mchinji). Payouts were based on the rainfall readings at the closest weather station to the individual in question, and premiums were lower in places where the likelihood of a bad rainfall shock was lower. Compared with the annual interest for the uninsured loan (27.5 percent), a farmer taking out an insured groundnut loan faced an effective interest rate ranging from 37.8 percent to 44.4 percent, depending on the area.

All farmers in the study were administered a household survey that covered income, education, assets, income-generating activities (including detailed information on crop production and crop choice), measures of risk aversion, and knowledge about financial products such as credit and insurance.

Results and Policy Lessons:

Loan Take-Up:Take-up was 33 percent among farmers who were offered the basic loan without insurance. Take up was lower, at only 17.6 percent, among farmers whose loans were insured against poor rainfall. A potential explanation is that farmers already were implicitly insured by the limited liability inherent in the loan contract, so that bundling a loan with formal insurance (for which an insurance premium is charged) is effectively an increase in the interest rate on the loan.

It is also possible that farmers may have been uncertain about the risks associated with the hybrid seeds. For those in the treatment group, the fact that they were offered insurance may have served as a signal that the seeds were a risky investment. Lower take-up of the credit plus insurance product would then be a rational response.

Analysis indicates that farmers who are wealthier and more educated were more likely to take up the insured loan. By contrast, there is no indication that farmer education, income, or wealth is related with loan take-up in the uninsured loan group.

Xavier Giné, Dean Yang

Cleaning Natural Springs in Kenya

 

Policy Issue: 

Diarrheal diseases are a leading cause of morbidity and mortality in the developing world, killing an estimated 2.6 million people per year between 1990 and 2000. Children under 5 experience an average of 3.2 diarrheal episodes per year,1 which accounts for 20 percent of deaths in this age group.2 Even when diarrheal episodes are not fatal, they can lead to severe dehydration and have long-term impacts on children’s cognitive and physical development. Diarrheal diseases are often transmitted when a water supply is contaminated with fecal matter, and may be endemic in places where the water supply is irregular.

 

Context of the Evaluation: 

Diarrhea is widespread in rural Kenya, where 43 percent of the population gets their drinking water from nearby springs, usually transported in 10 to 20 liter jerry-cans. Landowners have no incentive to improve the sanitation of water sources on their property because custom requires them to allow everyone free access to springs. As such, water is often contaminated by surface rainwater runoff as it seeps from the ground, and this contamination is spread to the population who collect drinking water at the spring. However, people are often reluctant to change their habits to include behaviors that may reduce diarrhea incidence such as hand washing or daily chlorination of water, resulting in low uptake for these “point of use” interventions.

 
Details of the Intervention: 

Researchers sought to find an inexpensive way to improve water quality at the source, and thereby reduce the burden of diarrhea by making improvements to springs. Working with a local NGO, they identified 200 springs in the Busia district of Kenya, and persuaded each local community to contribute 10 percent of the costs of the improvement project, usually in labor. At a cost of about US$1,000 per site, half of these springs had their sources encased in concrete, forcing water to flow through a pipe rather than seeping from the ground, thus preventing contamination from groundwater. NGOs conducted community meetings at which user committees comprised of local residents were selected and placed in charge of maintaining the protected springs. These committees were responsible for performing basic maintenance, including patching concrete and clearing drainage ditches, at an average cost of US$35 per year via community contributions.

Household characteristics such as income, education and health were approximately equal among the two groups at the start of the program, suggesting that there were no systematic differences between communities that had their springs protected and those that didn’t. Throughout the program, statistics were collected on the level of water contamination and diarrheal disease in all communities and by examining changes in these measures, impacts of the intervention could be assessed.

 
Results and Policy Lessons: 

Impact on Diarrhea: The simple infrastructure investment of “spring cleaning” significantly reduced both water contamination and the incidence of diarrhea. There was 66 percent less E-coli contamination in treated springs than in untreated ones, and an average of 24 percent less contamination in users’ home water supplies among households who collected water from multiple springs and those who only used protected springs. This incomplete transfer of benefits may be due to the fact that households may transport and store water in contaminated vessels.

Despite these mitigating factors, diarrheal incidence in children under 3 years old fell by 4.7 percentage points, or 25 percent, though there was no significant effect on children ages 5 to 12. Interestingly, diarrhea reduction was disproportionately concentrated among girls, suggesting that spring cleaning could be an effective tool for the improvement of female child survival.

Behavior Modification: Possibly due to the apparent benefits of using protected springs, families began increasing their use of protected springs for drinking water, relative to other sources. However there were no significant changes in water transportation, home water chlorination, boiling or hygiene practices, implying the experience with significantly cleaned water did not increase people’s taste for water improvement.

Willingness to Pay: Researchers used the information gathered about changes in use of protected springs to estimate how much time households were willing to expend to get cleaner water, and by extension how much they were willing to pay for it. These empirical estimates were approximately one third of what households report they are willing to pay for clean water and less than one-tenth of the value that policymakers often use when assessing social programs. The travel habits of residents of Busia, Kenya suggest that they are willing to spend at most 10.1 work days, or about US$0.89 to avert a diarrhea case. Using a high estimate for the value of time, this suggests a valuation of US$2,715 per averted child diarrhea death, far below the estimated value of a statistical life, and the cost-effectiveness cutoffs usually used in analyses of health projects in less developed countries. This implies that people either do not understand the causal link between clean water and diarrhea, which anecdotal evidence suggests they do, or that they place a lower value on improving infant and child health than typically assumed.

 

1 Disease Control- Priorities Project, “Public Health Significance of Diarrheal Illnesses,” http://www.dcp2.org/pubs/DCP/19/Section/2531. 

2 Parashar, Umesh, et al. “Global Illness and Deaths Caused by Rotavirus Disease in Children,” Emerging Infectious Diseases. Vol. 9. May, 2003.

 
Michael Kremer, Jessica Leino, Edward Miguel

Barriers to Fertilizer Use: Evidence from a Field Experiment in Kenya

Policy Issue:

Agricultural outputs in Africa have stagnated over the past decades: although total output has risen, food production has not kept up with the increase in Africa’s population. The number of chronically undernourished people in Africa has increased to 200 million in 1997-99.1 When used correctly, chemical fertilizer can substantially raise agricultural yields, yet usage of fertilizer remains low in Sub-Saharan Africa. Past studies suggest that usage is low because farmers have difficulty saving harvest income to purchase fertilizer for the next growing season, have limited information on the benefits of using fertilizer properly, and the fact that knowledge about fertilizer is not passed from one farmer to another. This project attempts to address all three issues.

Context of the Evaluation:

This project focuses on small-scale subsistence farmers in rural Western Kenya, many of whom grow maize as their staple crop. All farmers in this population are extremely poor subsistence farmers, earning on the order of $1 per day. Previous research in this area has shown that when used correctly, top dressing fertilizer can increase yields by about 48%, amounting to a 36% rate of return over just a few months. However, only 40% of sampled farmers in the Busia district of Western Kenya report ever having used fertilizer.

Details of the Intervention:

This experiment looks at a complex intervention with several components meant to increase fertilizer use and dissemination of knowledge. Farmers were recruited to the study through meetings at primary schools and randomly divided into four groups.

The first group received small, time-limited discounts which were valid within a 3 week window right after harvest, redeemable at a local shop. Farmers received coupons for a discount of about 15% of the price of fertilizer, for up to 25 kilograms.

The second group was encouraged to form farmers’ cooperative with their friends and neighbors to talk about fertilizer and agricultural practices. The researchers organized the groups and coordinated the first few meetings, but did not provide any direct information to the groups.

The third group participated in both the coupon scheme and the cooperatives.

A fourth group received none of these services, and served as a comparison.

Researchers will examine the changes in fertilizer usage between the different groups and whether farmers in the treatment groups talk to each other about agriculture more than others.  

A separate intervention was designed to investigate the spread of information and technology when provided only to a subset of farmers in the treatment and comparison groups. The research team visited the randomly selected farmers and provided them with ½ teaspoon measuring spoons, as well as information about the returns to using ½ teaspoon of fertilizer per plant. To enable diffusion of this technology to others in the community, the spoons were made available in nearby fertilizer shops to other farmers for a nominal fee. In addition, when distributing the measuring spoons, the farmers were given vouchers for spoons which they could give to their friends. This intervention will test the hypothesis that the fertilizer discount intervention and the cooperative intervention could lead to greater diffusion of information about fertilizer.

Results and Policy Lessons:

Results forthcoming.

 

1 Ernest Harsch, “Agriculture: Africa’s Engine for Growth”, available at http://www.un.org/ecosocdev/geninfo/afrec/vol17no4/174ag.htm.

2 Duflo, et. al., “Nudging Farmers to Use Fertilizer: Experimental Evidence from Kenya”, available at http://www.povertyactionlab.org/sites/default/files/publications/99_Understanding_Technology_Adoption.pdf

Esther Duflo, Michael Kremer, Jonathan Robinson

Alarm Boxes: Combining Commitment and Reminders

Policy Issue: 

In addition to the lack of banking infrastructure, many other constraints limit the availability and effectiveness of savings services for the poor. There has been very little research to map the demand for services so that products can be designed with clients’ needs and cash-flow in mind. These constraints in the supply and demand for savings service point to the need for specialized market research and product development efforts.  Efforts to unveil the actual needs and perceptions of low-income clients to better devise products and incentives for them may result in more rigorous savings behavior.  

The proposed intervention is based on the idea that individuals do not foresee events in the future and thus do not save for those unexpected needs in the present. Furthermore, individuals lack a safe place to save money temporarily and require a means to curb impulsivity. As a result, mechanisms to remind clients in a frequent and timely manner to save now, such as programmed alarms and lockboxes that do not allow for easy access to these savings, may improve the ability of clients to take future needs into account, stall unnecessary consumption in the present, and consequently change savings behavior.

 
Context of the Evaluation: 

Although the gross domestic savings rate in Bolivia in 2009 averaged about 20 percent of the country's GDP, on par with its neighbors (Peru at 26 percent and Ecuador at 21 percent), Bolivia’s savings rate has been historically much lower than those of other countries in Latin America, and access to savings services is severely constrained among the poor.1 Given the predominance of microfinance institutions (MFI) in the financial services sector in Bolivia, the responsibility of generating savings products and services for the poor generally falls on these institutions. Increasingly, due to the commercialization of the sector in Bolivia, the capturing of savings has become a major driving force behind MFI sustainability and growth.

Ecofuturo is a for-profit Bolivian microfinance institution that operates in many regions of Bolivia. Ecofuturo offers an array of individual credit, insurance, and savings products. These savings products range from basic non-programmed accounts to more complex commitment accounts that require the client to meet deposit quotas in order to qualify for rewards, such as higher interest rates. Working with Ecofuturo, IPA developed an innovative lockbox with a daily alarm that can only be turned off by depositing money. The lockbox acts as a psychological barrier to impulsivity by requiring its owner to visit the local bank branch where designated bank staff keep the key. By incorporating the use of alarms to the already familiar concept of lockboxes (i.e. piggy banks), IPA will test the impact of a technology that is both simple and cost-effective. The alarm acts like a reminder, not unlike a text message reminder to a cell phone, but over a period of time could prove to be more cost-effective and relevant for those who do not have access to a cell phone.

 
Details of the Intervention: 

IPA first tested the alarm box with a small pilot sample with plans to launch the product to approximately 800 Ecofuturo clients to evaluate its impact on savings behavior. In total, IPA will work with 2400 existing savings account holders. Two-thirds of the clients will be randomly selected to get an offer of a lockbox, and of those clients, half will be offered boxes with alarms. The remaining group of clients will serve as a comparison group. The impact of an information wheel that clients can use to determine daily savings amounts required to ascertain a goal in a given time will also be assessed. Within each of the three groups (comparison, lockbox, lockbox with alarm), half of the clients will be randomly selected to receive the wheel. Savings rates and frequencies will be measured amongst treatment and comparison groups after approximately one year.

 
Results and Policy Lessons: 

Results forthcoming.

 

1 The World Bank Group. http://data.worldbank.org/indicator/NY.GDS.TOTL.ZS

Dean Karlan, Margaret McConnell, Jonathan Zinman

Household Water Connections in Morocco

Many people in the developing world lack access to clean water.  Can providing clean water make kids healthier? Will children attend school more often? Will adults be able to work more regularly? We worked with the Government of Morocco to evaluate the impact of offering piped water connections at a subsidized price, and on credit. It turned out that there were no major health or educational benefits as most households already had access to free public taps, but people were willing to pay for a private tap at home, and the time saved walking to the tap made for more free time and higher self-reported happiness.

Policy Issue: 

Households in developing countries spend considerable amount of time fetching water. The time-burden of water collection does not typically spare anyone in the household, but in many countries it is borne primarily by women and girls. Most interventions to connect poor households to the drinking water network are primarily concerned with improving physical health. Yet, over and beyond its direct effect on physical health, improved water access could have important effects on the household well-being. By reducing the time burden of water collection, improved water access not only frees up time that could be spent on additional leisure or production (paid labor or schooling), but also removes an important source of stress and tension. But it might also be welfare-reducing as women face restricted mobility outside of excursions to collect water. An in-home water connection could cut off an important opportunity to socialize.

Context of the Evaluation: 

In urban Morocco, the setting of this study, households that rely on public taps spend more than seven hours a week collecting water, despite a relatively high density of water taps. In our sample, 65% of households without a water connection report that water is a major source of concern: 15% have had a water-related conflict within the family and 12% with their neighbors. Thus, both within the family and between families, water seems to be the primary source of stress and tension.

Details of the Intervention: 

J-PAL worked in collaboration with Amendis, the local affiliate of an international private utility company, which operates the electrical and wastewater collection networks as well as the drinking water distribution in Tangiers, Morocco. In 2007, Amendis launched a social program to increase access to piped water and sanitation. As of the end of 2007, approximately 845 low-income households living in “on-the-grid neighborhoods” of Tangiers (i.e. in principle easily connectable) did not have a household water connection because they could not afford the connection fee. These households had free access to public taps in their neighborhood, however, and they also all had sanitation facilities at home.

The program provided a subsidized interest-free loan to install a water connection. The loan was to be repaid in regular installments with the water bill over three to seven years. The subsidy did not cover the cost of installing the connection or the cost of water consumed. To pilot-test the program, a door-to-door awareness campaign was conducted in early 2008 among 434 households, randomly chosen from the 845 that needed a connection. Those households received information about the credit offer as well as help with the administrative procedures needed to apply for the credit. The remaining households (the comparison group) were eligible to apply for a connection on credit if they wanted to, but they received neither individualized information nor procedural assistance until 2009.

Results and Policy Lessons: 

Since the participating households already had access to the water grid through free public taps, no improvements in the quality of water consumed by households have been found. Despite significant improvement in water quantity, no change in the incidence of waterborne illnesses was found. Nevertheless, households are willing to pay a substantial amount of money to have a private tap at home. Getting connected generates important time gains, but does not lead to increases in labor market participation, income, or schooling attainment. The spared time seems to be used for leisure and social activities.  Because water is often a source of tension between households, home connections appear to improve social integration. Overall, despite the financial cost, households’ self-reported happiness improves substantially when they are connected to the water system at home.

Florencia Devoto, Esther Duflo, Pascaline Dupas, William Pariente

Farmer Decision-Making and Technology Experimentation in Indonesia

Policy Issue: 

Despite regularly making decisions that affect their crop yields, farmers in the developing world may lack information about how to appropriately use farming inputs or techniques. For instance, a farmer must decide on the optimal timing of planting, the depth and spacing of seeds, the amount of fertilizer to use, and the timing of fertilizer use, among other things.  Farmers may be reluctant to engage in potentially risky experimentation on their own plots, which prevents them from gathering new information about efficient agricultural practices. And even when farmers have information available to them about ways to increase their yields, they may not adopt optimal agricultural practices. One explanation for this is that farmers fail to notice certain details about the cultivation process simply because they may not believe that information to be useful. This suggests that it could be possible for farmers to learn about optimal farming techniques if they are presented with information that helps them notice new or previously neglected dimensions of the production process. 

Context of the Evaluation: 

Seaweed farming has been prominent in Nusa Penida district in Bali, Indonesia since it was introduced during the 1980s. Most seaweed is cultivated by taking raw seaweed and cutting it into pods, which are then planted at intervals along the ocean floor. The size of the pods and distance between them is determined by the farmer. Due to its relatively short crop cycle of 35 to 40 days, seaweed cultivation provides farmers with ample opportunity to learn through experimentation and implement new techniques. However, 86 percent of seaweed farmers sampled were unable to provide information about the pod size they used on their plots or what they believed to be the optimal pod size for seaweed cultivation.

Details of the Intervention: 

From a group of 232 seaweed farmers, researchers randomly selected 117 to participate in an experimental trial to determine the optimal pod size for seaweed cultivation on their plots. Farmers in the treatment group assisted an agricultural extension worker to vary the seaweed production methods on one of their plots and received the trial results afterwards. The remaining 115 farmers served as the comparison group and received no new services. 

The farmers in the treatment group were randomly assigned to one of two sub-groups that varied the size and weight of seaweed pods.

  • Pod Size Treatment: Researchers collected data on the variation in pod size within each farmer’s plot to understand whether farmers could achieve a higher yield by systematically planting pods of a specific size. 
  • Pod Weight Treatment: Researchers collected data on how variation in the weight and distance between pods affected the yield. In both cases, farmers observed as enumerators planted the seaweed pods. 

All farmers in the treatment group received compensation for their participation in the form of farming inputs, a guaranteed income from the plot they cultivated as part of the trial, and a small gift worth US $1.  

Researchers conducted a follow-up survey from April to May 2008 to test whether farmers changed any of their methods after participating in the trial. After the first follow-up survey, farmers were given summarized trial results, which included information on the returns from different farming methods and highlighted which pod size and pod weight produced the highest yields, respectively. Enumerators talked through the results with the farmers, in addition to providing them with a written summary. Two months after the results were distributed, researchers conducted a second follow-up survey to determine whether farmers had changed their methods as a result of having received the trial results. 

Results and Policy Lessons: 

Researchers found that farmers neglect certain dimensions of seaweed cultivation and fail to use the optimal level of inputs along those neglected dimensions. For instance, while most farmers are attentive to the optimal distance between seaweed pods, very few farmers had consciously experimented with pod size prior to the trial. 

Participation in the trial alone did not induce a significant change in farming techniques, which suggests that learning through observation and experience does not always guarantee effective use of technology. However, farmers in the treatment group report making large and significant changes in their production techniques after receiving summarized trial results and specific recommendations about which pod size or weight improved yields. The number of farmers who reported changing their techniques increased by 16 percentage points between the first and the second follow-up surveys.  Similarly, pod size increased by approximately 7 grams in the pod-size treatment sub-group relative to the comparison group. This was consistent with the average change in pod size recommended by enumerators. 

Thus, while farmers did not appear to consider pod size to be an important part of the production process prior to the trials, providing summary information on the optimal pod size appeared to change their use of this production input. This suggests that farmers who fail to notice may not learn even when they are actively experimenting and, as a result, may not notice the very features of a technology that make it profitable. Training programs for farmers may be useful, not only for new technologies, but also for existing technologies that individuals may have had prior experience with.  

 
Rema Hanna, Sendhil Mullainathan

Finding Missing Markets: An Agricultural Brokerage Intervention in Kenya

Policy Issue: 

In much of the developing world, farmers grow crops only for local or personal consumption, despite export options which are thought to be much more profitable. There are several plausible reasons why farmers might choose to grow crops for local markets, forgoing the opportunity to make more money through export crops. There may be information gaps about profitability of export crops, lack of access to the capital needed to make the switch to export crops, inadequate infrastructure to bring crops to urban centers, concern over risky export markets, or misinterpretation by researchers as to the true profit opportunities. 

Context of the Evaluation: 

Kenya’s horticultural sector, which includes fruit and vegetable production, has received a great deal of attention over the past decade due to the rapid and sustained growth of its exports to Europe. Although Europe’s appetite for Kenyan agriculture exports has been great, small farmers have largely failed to cash in on this opportunity. Many farmers instead receive below-market prices for their crops by selling them at the local market or to intermediaries, who then resell the produce at regional market centers or to export firms. In the study sample, about half of the household income came from agriculture, and most owned the land they cultivated, which was usually about one acre. Farmers grew subsistence crops (beans, maize, potatoes, and kale) 50 percent of the time and cash crops (coffee, bananas, and tomatoes) 34 percent of the time. Only 12 percent of farmers grew any export crops.  

 
Details of the Intervention: 

In collaboration with DrumNet, a Kenyan NGO, researchers evaluated whether a package of services could help small farmers adopt, finance, and market export crops, and thus make more income. DrumNet tried to link smallholder farmers to commercial banks, retail farm suppliers, transportation services, and exporters. To be a member of DrumNet, a farmer had to be a member of a registered self-help group (SHG), express interest in growing export crops marketed by DrumNet (i.e. French beans, baby corn, or passion fruit), and have irrigated land. 

In 2003, researchers randomly divided the 36 active self-help groups (SHGs) in the Gichugu area into three equal groups: the first treatment group received all DrumNet services; the second treatment group received all DrumNet services except for credit; and the third served as the comparison.

All individuals in the two treatment groups received a four-week orientation course, which explained the financing and selling process, and good agricultural practices. In additional, all treatment individuals opened a personal savings account with a local commercial bank to accommodate possible future business transactions. Individuals in the credit treatment group also contributed the equivalent of a week’s labor wages to an insurance fund, which would serve as partial collateral for a line of credit. After being organized into groups of five, which were jointly liable for individual loans taken out, individuals in the credit treatment group received an in-kind loan from a local agriculture supply store.

At harvest time, for individuals in both treatment groups, DrumNet negotiated prices with an exporter and arranged a produce pickup. Once the produce was delivered to the exporter, the exporter payed DrumNet who, after deducting any loan repayments, credited the remainder to the individual savings accounts that each farmer opened when they registered. 

 
Results and Policy Lessons: 

Impact of the DrumNet Program: One year after the program began, treatment individuals were 19.2 percentage points more likely to be growing an export crop, but there were no significant gains in income for the full sample. However, among first-time growers of export-oriented crops, program participation led to a 31.9 percent increase in income.

Out of the twelve SHGs in each treatment group, ten decided to take advantage of DrumNet services when credit was offered, compared to only five of twelve when it was not, implying that farmers perceived credit as an important factor for cultivating export crops. However, access to credit had no effect on income gains compared to no-credit SHG groups. 

Long-term Consequences: Unfortunately, one year after the evaluation ended, the exporter refused to continue buying from the DrumNet farmers since none of the SHGs had obtained EU export certifications. This led to DrumNet’s collapse as farmers’ export crops were left to rot and loans went into default. Farmers returned to growing for local markets, underscoring the original concerns over export market risk. 

 

Nava Ashraf, Xavier Giné, Dean Karlan

Encouraging Adoption of Health Technology: The Case of Rapid Diagnostic Tests in Zambia

Policy Issue: 

Malaria is one of the world’s foremost public health concerns, causing as many as 1 million deaths each year, the majority of which occur in sub-Saharan Africa.1 Malaria is often associated with poverty—the poor are most affected, likely because they have reduced access to medical services and information, and the lowest ability to avoid working in malaria epidemic areas. The disease can also perpetuate poverty, taking a high toll on households and healthcare systems. Rapid diagnostic tests (RDTs), a fast and reliable blood test to detect the malaria parasite, can make the detection and treatment of malaria more efficient. The World Health Organization estimated in 2008 that only 20% of patients with suspected malaria were being subjected to diagnostic tests; the rest were clinically diagnosed based on their symptoms. A mistaken clinical diagnosis can lead to over-prescription of malaria treatment and increased drug resistance among malaria parasites as well as waste of limited drug supplies. This study tests different mechanisms for encouraging the use of and compliance with the results of RDT

Context of the Evaluation:

In 2008, there were 247 million cases of malaria and nearly one million deaths, primarily among children living in Africa.2 Malaria is the leading cause of mortality in Zambia and is responsible for one quarter of childhood deaths.3 Despite improvements in technology that allow for affordable and simple mechanisms to diagnose malaria and effective regimens to treat malaria, the disease continues to be a significant health challenge in many Sub-Saharan African countries. The development of sensitive and specific RDTspresents an opportunity to improve the targeting of treatment for malaria. RDTs use modern molecular biological technology to allow diagnosis by a health worker with limited training in just fifteen minutes. RDTs can detect with great accuracy the existence of antigens that are produced in the presence of malaria parasites.

Details of the Intervention: 

This study will identify what barriers prevent health workers from using RDTs, and will test different mechanisms for encouraging the use of and compliance with RDTs. Approximately one thousand health facilities from across Zambia will be randomly to one of three treatment groups or a comparison group, which will see no changes in treatment. The three treatment programs include:

  1. An intervention to help clinicians update their knowledge on local prevalence rates. If a clinician believes that malaria is endemic in his region, then he may be more likely to over-diagnose malaria or believe that all fevers are caused by malaria. The intervention will involve training health staff on the epidemiology of malaria. Additionally, it will include an interactive component where clinicians are able to generate their own information on prevalence rates in their area through testing.
  2. An intervention to address doubts about the accuracy of RDTs. If a clinician believes that the RDT is giving a false negative, then he may prescribe anti-malarials to patients who test negative “just in case”. The intervention will involve the clinician following up with patients who test negative several days later so they can see that indeed these individuals were negative for malaria.
  3. An intervention to train clinicians how to diagnose and treat other causes of fever beyond malaria. If a clinician lacks the tools or knowledge to diagnose other causes of febrile illness, he may prescribe anti-malarials as an alternative to “doing nothing”. The intervention will provide training for clinicians on both the differential diagnosis for fever as well as the risks of not treating other febrile illnesses.

These three interventions will allow the researchers to determine what issues are preventing the use of RDTs, and determine what format of information dissemination is most effective for communicating with healthcare providers.

Results and Policy Lessons: 

Results forthcoming.

1 WHO, "10 Facts on Malaria," http://www.who.int/features/factfiles/malaria/en/index.html.
2 WHO, “Malaria,” http://www.who.int/mediacentre/factsheets/fs094/en/. 
3 USAID, “Population, Health and Nutritional Issues in Zambia,” http://www.usaid.gov/zm/population/phn.htm.

 

Nava Ashraf

Demand for Rainwater Harvesting Devices in Uganda

Poor access to safe drinking is an acute problem in many developing countries which has both health and social repercussions. In order to improve access to safe drinking water, Relief International (RI) has developed a rainwater storage device (RSD), which consists of a rubber bag approximately 1.5m across and 1.5m tall when full. Researchers are evaluating this new technology in Kamwenge district in Uganda. 

Policy Issue: 

Poor access to safe drinking is an acute problem in many developing countries which has both health and social repercussions. Lack of safe water for drinking, bathing, and other household tasks is the primary cause of diarrheal diseases, which account for 15 percent of deaths among children under five years of age.[1] Poor access to water also entails large time costs associated with gathering water. In some parts of Africa, women spend up to eight hours per day collecting water. New technologies, such as rainwater storage devices, could improve access to safe drinking water and decrease the time needed for water collection. However, such new technologies are only useful to the extent that they are affordable and acceptable to the intended beneficiaries. Before any large investments are made in the development and distribution of a technology, it is necessary to determine the potential size of the market, the most effective marketing strategies to promote adoption, and the potential impacts it could have on the lives of the poor.

Context of the Evaluation: 

In order to improve access to safe drinking water, Relief International (RI) has developed a rainwater storage device (RSD), which consists of a rubber bag approximately 1.5m across and 1.5m tall when full. The bag is held up by a simple earthen foundation and is fed by a series of gutters. It can hold up to 1000 liters of water, which is estimated to meet the basic needs of a family of five for ten days. 

Researchers are evaluating this new technology in Kamwenge district in Uganda. Residents of Kamwenge are particularly likely to benefit from a rainwater storage device, as the district receives substantial rainfall during the two rainy seasons – the first and smaller of the two lasts from the end of February to the end of April, while the second and longer season lasts from mid-September to the beginning of December. 

Details of the Intervention: 

This study will assess the demand for rainwater storage devices and determine potential marketing strategies. Specifically, researchers will randomly vary the incentives and marketing conditions associated with the sale of rainwater storage devices to different households. Researchers will experimentally vary the price for the device by offering discount vouchers to random subsets of households.

Researchers will also randomly apply two different marketing schemes across villages. In the first scheme, a product ambassador will be chosen from each village and given training and materials to promote the device within the village. In the second marketing scheme, the first household within each village that purchases the device at full price will receive free installation. Both marketing schemes are intended to increase locally available information about the device and promote take-up by others in the village. 

The intervention will be implemented in two distinct waves spread 6 months apart, in order to study the importance of information transmission in generating demand for the new technology. For instance, it may be the case that second-wave households would have had some indirect experience with the new technology through their friends who adopted in the first wave, affecting their likelihood of adoption. The two-wave strategy also creates the opportunity to examine whether the overall level of demand changes once society becomes more familiar with the product and its price is anchored. 

A follow-up survey will measure women’s participation in the workforce, child school attendance, and changes in household economic activity among adopters and non-adopters.

Results and Policy Lessons: 

Results forthcoming.

1. World Health Organization (WHO). World Health Statistics 2011.http://www.who.int/whosis/whostat/EN_WHS2011_Full.pdf

Mushfiq Mobarak

Savings, Subsidies and Sustainable Food Security in Mozambique

Policy Issue:

Motivated by the recent escalation in food prices around the world, several countries, including Kenya, Malawi, Rwanda, and Zambia, have implemented large-scale fertilizer subsidy programs to boost food security and small farm productivity. If people are unaware of the benefits of using fertilizer, or do not know how to use it, then subsidies may be a useful tool to give people experience with using fertilizer, and promote adoption. However, a long-standing question is whether one-time or temporary provision of subsidized fertilizer can get households to adopt it long-term, or whether input use and farm production eventually return to previous levels after subsidies are phased out. The key to determining whether provision of subsidies can lead to long-term growth, even after the subsidies are no longer in effect, is to discover if farmer practices change fundamentally, or whether these practices change only (if at all) when subsidies are being offered.

Context:

Large-scale emigration, economic dependence on South Africa, and a prolonged civil war hindered Mozambique’s development until the mid 1990s. Agriculture accounts for almost 29 percent of the country’s GDP, however agricultural technology adoption has been slow in Mozambique compared to other counties in the region. Most of the farmers interviewed for this study had little or no experience with application of chemical fertilizers and other agro-chemical inputs.

Description of Intervention:

Researchers are investigating the impacts of fertilizer subsidies on smallholder farmers in rural Mozambique, and in particular, whether providing farmers opportunities for savings accounts can help subsidies achieve a greater sustainable impact. Vouchers for fertilizer were distributed randomly to a sample of farmers. In partnership with Banco Oportunidade de Moçambique (BOM), researchers also randomized offers of one of several different savings accounts interventions, to see how the subsidies and savings accounts complemented one-another.

The sample comprises farmers with access to some type of agricultural extension service, either through an NGO or government entity, so that they have access information on how to use fertilizer if they choose to use it. Researchers worked with two sub-groups of farmers. The voucher randomization (VR) sample is comprised of farmers randomly distributed (or not distributed) vouchers for fertilizer. The VR sample enabled researchers to examine the interaction between voucher receipt and savings incentives.

Treatment Groups:

 

No savings offered

Offered regular interest rates

Offered individual savings with 50% match

Offered group savings with match

Received voucher for fertilizer

Treatment Y-0

Treatment Y-1

Treatment Y-2

Treatment Y-3

Did not receive voucher for fertilizer

Treatment N-0

Treatment N-1

Treatment N-2

Treatment N-3

As shown in the table, the VR sample consists of three treatment groups which received different combinations of interventions, and a comparison group which did not receive an intervention. In treatment group 1, farmers were offered a savings account with standard BOM interest rate. Treatment group 2 offered “matched savings” accounts, where farmer received matched funds equal to 50 percent of his or her average savings balance (up to 3,000 MZN, or US$112) during a defined match period. (The match rate is the percentage of the average balance in the account that is contributed by the project at the end of the match period, not an annual percentage rate.) In treatment group 3, farmers were offered a savings match with a group incentive, where the match rate rises or falls in accordance to the average account balance of the entire group. Farmers are not required to use the match for fertilizer, yet the match amount does allow each farmer to afford the inputs provided in the fertilizer package, which many farmers could not afford otherwise.

During meetings with farmer groups, project staff discussed the importance of savings and keeping part of one’s harvest proceeds for fertilizer and other agricultural inputs for the next season. Farmers were also given specific instructions about using the fertilizer package for maize, and information on BOM savings services and locations. After farmers completed the baseline survey, savings accounts were offered, and project staff assisted interested farmers in filling out the forms to open an account. Farmers then could make their initial deposit at a BOM branch or a Bancomovil, a mobile bank that services many of the sites.

During follow-up surveys planned for 2012 and 2013, researchers will collect data on per-capita income and expenditures, maize yields and use of seed varieties and fertilizers, and the creation and use of savings accounts.

Results:

Results forthcoming.

Michael Carter, Dean Yang

Promoting Sustainable Farming Practices in Malawi

Policy Issue:

Low productivity in agriculture is a pressing challenge in the developing world.  The compound effects of farming with mechanized soil tillage, climate change, and increasing urbanization are adversely affecting the long-term productivity of soil worldwide.  As a result, crop yields in developing countries are often many times lower than those that could be achieved using readily available technologies and farming techniques. Improving food security and agricultural incomes therefore depends on farmer adoption of these tools and techniques. A critical determinant of new technology adoption is the learning process through which information on these techniques is disseminated, understood, and applied. Although the importance of information flow through existing village and social networks in developing countries is well-documented, to what extent these networks can be used to disseminate new information from public sources—such as agricultural extension officers—remains unclear.

Context:

A lush climate and rich soil make Malawi well suited for agriculture, which is central to the country's economy and national life, making up 36 percent of its GDP[1] and occupying more than 80 percent of its workforce.[2] Tobacco is the leading export crop, followed by tea, sugar and cotton. The staple food crops are maize, cassava and millet, grown by smallholder farmers mostly at the subsistence level. Most rural families have too little land to produce sufficient food and too little income to buy extra. According to some reports, a quarter of the population runs out of food only five months after the harvest.[3]

Description of the Intervention:

Researchers investigate how new information on agricultural technology from outside sources, such as government-employed agricultural extension agents, is transferred through existing village and social networks. Understanding how gender and relationships affect communication between extension officers and farmers, as well as between farmers is crucial to designing effective information-based interventions to promote technology adoption. Both the technologies and methods for disseminating information are evaluated in the context of the Malawi Agricultural Development Programme Support Project (ADP-SP). This project is intended to support the efforts of the Malawi Ministry of Agriculture to achieve sustainable productivity growth in smallholder maize production systems.

Each village assigned to receive the intervention will be randomly assigned a dissemination method as well as a farming technique that is to be promoted. The two techniques for dissemination are:

(1)   Fertilizer Nutrient Management (FNM), which includes the use of efficient combinations, timing, and spatial concentration of fertilizer application and results in short-run increases in land productivity.

(2)   Conservation Agriculture (CA), which includes pit planting, minimal tillage, and mulching. CA is associated with long-run returns, as CA practices increase the biodiversity of farm ecosystems, allowing non-chemical organisms to take a role in soil maintenance.

The randomly varied dissemination methods are:

(1)   Extension officers, working through their existing channels and provided with incentives based on the adoption of the techniques in their areas.

(2)   Extension officers collaborating with lead farmers in each village, whom they select in consultation with the community. Lead farmers will be provided with incentives based on the adoption of the techniques in their villages.

(3)   Extension officers collaborating with peer farmers, selected through focus groups in each village and representing average farmers spatially dispersed throughout the village. Peer farmers will receive incentives based on adoption in their neighborhoods.

Across all three types of dissemination methods, incentives were sometimes randomly assigned to the communicators.  In the lead and peer farmer villages, the gender composition of the message sender will be varied. The random variation in the technology promotion agent and in the technique being promoted will allow researchers to determine the potentially differing outcomes of various components of information dissemination programs.

Results:

Results forthcoming.

[1] US Department of State, Bureau of African Affairs. “Background Note: Malawi.” January 11, 2011

[2] World Vision. “Country Profile: Malawi.” http://worldvision.com.au/Libraries/3_1_2_Country_Profiles_-_Africa/Malawi.sflb.ashx

[3] ibid

Ariel BenYishay, Mushfiq Mobarak

What Matters (and What Does Not) in Malaria Prevention in Kenya

Insecticide-treated bed nets have been proven highly effective in preventing malaria, reducing maternal anemia, and infant mortality, both directly for users and indirectly for non-users in their vicinity. Despite their proven impact, less than half of Kenyans sleep under a bednet. This study tested willingness to pay by households and a range of marketing effects. The demand for bed nets is very sensitive to price - an increase in price from free to $1 leads to a drop of 35 percentage points in take up. However gaining access to a free bednet increases households likelihood of buying one in later years. The marketing messages had no impact. 

Policy Issue: 

Over 10 million children under 5 die every year in the world. It is estimated that nearly two thirds of these deaths could be averted using existing preventative technologies, such as vaccines, insecticide-treated materials, vitamin supplementation or point-of-use chlorination of drinking water. A key policy question is how to increase availability and adoption of these technologies. In particular, what are the roles of prices, social networks and marketing in the adoption of such products? A commonly proposed way to increase adoption in the short-run is to distribute those essential health products for free or at highly subsidized prices. The rationale for some subsidization is evident for health interventions that generate positive health externalities. In addition, when the majority of the population is poor and credit-constrained, subsidies might be necessary to ensure access to the technologies.

For products like vaccines, one-time adoption is sufficient to achieve eradication of the corresponding disease -- every child needs to be immunized only once. But other products, such as water treatment kits or anti-malarial bednets, require sustained adoption and use to generate the hoped-for health impact. A key question is whether policies aimed at achieving immediate adoption of such technologies increase or dampen their long-term use. It is often argued that free or highly subsidized distribution may generate a “dependency” effect, whereby beneficiaries anchor around the subsidized price and refuse to pay for the product once the subsidies are lifted. Furthermore, if people do not put free products to good use, incorrect information about the quality of the product might diffuse through the community. In this context, marketing messages might be important to increase adoption.

Context of the Evaluation: 

In Kenya, malaria is responsible for one out of every four child deaths.1 It impacts economic growth and productivity, and almost 170 million working days are lost annually due to the disease.2 Insecticide-treated bed nets (ITNs) are used to prevent malaria infection and have been proven highly effective in reducing maternal anemia and infant mortality, both directly for users and indirectly for non-users with a large enough share of net users in their vicinity. ITNs have been shown to reduce overall child mortality by 18% and reduce morbidity for the entire population. Despite their proven efficacy, less than half of Kenyans sleep under an ITN. Priced at US$5-7 per net, they are unaffordable to most families. Recently, a new generation of ITNs was invented: the long-lasting ITN (LLIN), which keeps its insecticide properties for its entire lifespan (typically 3-4 years).

Details of the Intervention: 

Households were given a voucher for a LLIN at a randomly assigned subsidy level, ranging from 40-100%. The final prices ranged from 0 to US$4.60 and households had three months to redeem their voucher. Twelve months after the distribution of the first LLIN voucher, households received a second LLIN voucher, redeemable at the same retailer as the first LLIN voucher received a year earlier. Unlike the first voucher however, all households faced the same price (US$2.30) for this second voucher. By comparing the take up rate of the second, uniformly-priced voucher in the second phase price groups, researchers are able to test whether being exposed to a large or full subsidy dampens or enhances willingness to pay for the same product a year later.

This study also evaluated the effects of two interventions based on behavioral models derived from psychology: varying the framing of the perceived benefits; and having individuals verbally commit to purchase the product. At the time they received their first voucher, households were exposed to a randomly assigned marketing message. The “health framing” group emphasized the morbidity and mortality due to malaria which could be avoided by using the net. The “financial framing” group emphasized the financial gains households would realize (from averting medical costs and loss of daily income) if they could prevent malaria. A third group received no marketing message. Finally, a randomly selected half of all the households were asked to verbally commit to buy the ITN, and state who would sleep under it once they had bought it.

Results and Policy Lessons: 

Price Sensitivity: The demand for malaria-preventing bed nets in Western Kenya is relatively price sensitive; an increase in price from $0 to $1 leads to a drop of 35 percentage points in take up, and an increase from $1 to $2 leads to a further drop of 25 percentage points. Although the price effects are large, the price-elasticity observed here is lower than that found in other similar studies, possibly because households in this experiment had three months to redeem their voucher, and therefore time to save for it.

Diffusion Effects: Gaining access to a free or highly subsidized LLIN in the first year increased households’ reported, as well as observed, willingness to pay for a second LLIN. This positive experience effect trickles down to others in the community: households facing a positive price were more likely to purchase the LLIN when the density of households around them who received a free or highly subsidized LLIN was greater.

Marketing Effect: Neither of the two framing options (health or financial) had any impact at all on LLIN take up, and women to do not appear to have a different price-elasticity than men. Likewise, the verbal commitment treatment had no impact on actual investment behavior, despite a 92% initial agreement to purchase the LLIN.

1The World Bank, “News & Broadcast: World Bank Intensifies Anti-Malaria Efforts in Africa”,http://go.worldbank.org/IWWIICOOC0. (Accessed August 26, 2009)
2The World Bank, “Booster Program for Malaria Control in Africa – Kenya,”http://go.worldbank.org/EGMG4G6DX0. (Accessed September 14, 2009)

 

Pascaline Dupas

Chlorine Dispensers for Safe Water in Kenya

Two million children die of diarrheal disease each year and contaminated water is often to blame. Treating water with chlorine could substantially reduce this toll. The most common approach to chlorination in areas without piped water infrastructure is to offer small bottles of chlorine for sale to consumers.

However, chlorine use has been slow to catch on in this system. In this Kenyan study area, for example, less than 10% of households regularly use chlorine at a monthly cost of approximately US$0.30, despite several years of vigorous social marketing that has raised awareness about the product.

Based on this finding, the research team has developed a way to drastically cut the cost of chlorinating water by reducing packaging and distribution costs -- which account for the majority of the price of chlorine sold in individually-packaged bottles -- by installing chlorine dispensers at communal water sources. Users turn a knob on the dispenser to release a pre-measured dose of chlorine appropriate to treat the volume of water typically collected. The presence of a dispenser provides a reminder to treat water and harnesses peer effects to help increase take-up.

A randomized evaluation, in which provision of chlorine dispensers is phased in over time, is demonstrating the impact of the intervention on child health outcomes and will shed light on how the technology can be sustainably managed in a variety of settings. So far dispensers have been provided to 5,000 people at 20 rural water points.

Results:

During an unannounced visit three to six months after the installation of the dispensers, 61% of households in communities with a dispenser had detectable chlorine in their drinking water, compared to 8% of households in a comparison group. The percentage of households who use the dispensers was rising over time.

A second round of pilots is underway, with dispensers at a variety of settings, including schools, unprotected springs, and several urban sites. Work is underway to refine the dispenser hardware to further lower costs and develop strategies for marketing, cost recovery, and sustainable scale-up. The second round of the study will be completed in 2010, and further work to understand how to finance and maintain dispensers will be ongoing until the end of 2011.

Efforts are also underway to expand the program in Kenya and throughout the world. Chlorine dispensers could be appropriate for up to 2 billion people globally. Scaling up this approach globally could drastically alter the rural water landscape and save the lives of 100,000 – 250,000 children each year.

Do you want to help support IPA's work in providing safe water to people in Kenya?  Donate here and select the "Chlorine Dispensers for Safe Water" fund.

Michael Kremer, Jessica Leino, Edward Miguel

Text Message Reminders for Malaria Treatment

Increasing mobile phone ownership in developing countries presents exciting new opportunities for delivering public health and other social programs. Mobile phone subscriptions in developing countries increased from 7.9 per 100 inhabitants in 2001 to 78.8 per 100 inhabitants in 2011[1].

Increasing mobile phone ownership in developing countries presents exciting new opportunities for delivering public health and other social programs. Mobile phone subscriptions in developing countries increased from 7.9 per 100 inhabitants in 2001 to 78.8 per 100 inhabitants in 2011[1]. Rigorous studies of health promotion efforts delivered by mobile phones and other technologies can inform effective and efficient health programs The impact of text message reminders on patient adherence to short-term treatments, such as that for malaria, remains largely unexplored. This study is a first attempt to evaluate the impact of text message reminders on patient adherence to malaria treatment through a randomized controlled trial in Tamale, Ghana, from May to October 2011.

Results from this study, which is still underway, along with those from studies in Uganda (here and here), Kenya, and Zambia conducted in partnership with the Clinton Health Access Initiative, will be used to inform global policy on malaria diagnosis and treatment.

Policy Issue:

Despite the massive international efforts made over the past decades, malaria continues to be one of the primary causes of under-5 mortality worldwide. An estimated 1.24 million malaria deaths occurred in 2010, more than half of which were among children[2]. Of malaria deaths, 92% occurred in sub-Saharan Africa, where Plasmodium falciparum, the most virulent form of the malaria parasite, is most common[3]. P. falciparum has developed widespread resistance to several classes of antimalarial drugs, leaving artemisinins as the only known class of antimalarials that are effective at the population level.

P. falciparum becomes resistant to antimalarial treatments when parasites develop rare, random genetic mutations that prevent drugs from being effective. Artemisinin-based combination therapies (ACTs) are the first line treatment recommended by the World Health Organization because combination therapies lessen the likelihood that P. falciparum will develop resistance; parasites that mutate to become resistant to one drug should be killed by the other drug and there is a substantially lower likelihood that random mutations will confer resistance to both treatments.  Patients must complete the full dose of ACTs to most effectively prevent P. falciparum from developing resistance to artemisinins, but many patients do not finish their drugs. This study investigates the impact of text message reminders on adherence to ACT regimens. 

Evaluation Context:

Malaria is one of the predominant causes of illness in Ghana, especially among young children. Ghana is a pilot country for the Global Fund’s Affordable Medicines Facility – malaria (AMFm), which aims to expand access to ACTs by highly subsidizing their cost. Ghana has also been rolling out a National Health Insurance Scheme since 2004, which allows registered members to receive ACTs free of charge. This study took place in and around Tamale, the capital of Ghana’s Northern Region.

Description of the Intervention:

Data enumerators recruited respondents at public and private hospitals, clinics, pharmacies, licensed chemical sellers, and other vendors and followed up all patients that could be reached by motorcycle within 30 minutes of leaving the town center. Vendors identified individuals purchasing malaria medicine and gave them a flyer to enroll in a mobile malaria information system and directed them to data enumerators. Willing and eligible participants received baseline participation questionnaire soliciting the participant’s mobile number, directions to his/her home and possible times to locate the patient (or his/her primary caretaker) at home. Participants who enrolled in the text messaging system were randomized to a treatment group or a comparison group. Participants randomized to the treatment group received one reminder for each of the six doses of ACT over the course of 60 hours. Those assigned to the treatment group were randomized to receive a short message, “'Please take your MALARIA drugs!” or a long message, “'Please take your MALARIA drugs! Even if you feel better, you must take all the tablets to kill all the malaria.”

Data enumerators made home visits between 72 and 96 hours after the in-vendor recruitment, when the course of the ACT treatment was supposed to be completed. The main outcome of the study was adherence, which was assessed by detailed, per-dose self-report and by data enumerator observation of pill packets. Enumerators also asked respondents about malarial symptoms, care-seeking patterns, awareness of malaria and malaria medications. In cases when a home-visit could not be made in the requisite time frame, participants were followed-up over the phone.

Results forthcoming


[1] International Telecommunications Union. (2012). Mobile cellular subscriptions per 100 inhabitants. Retrieved from: http://www.itu.int/ITU-D/ict/statistics/.

[2] Murray, C., Rosenfeld, L., Lim, S., et al. (2012). Global malaria mortality between 1980 and 2010: A systematic analysis. Lancet, 379(9814): 413-431.

[3] Murray, C., Rosenfeld, L., Lim, S., et al. (2012). Global malaria mortality between 1980 and 2010: A systematic analysis. Lancet, 379(9814): 413-431.

 

 

Gunther Fink, Julia Goldberg

Using Internal Risk Models to determine changes in Committee Behaviors (MIR)

Policy Issue:
Policy Issue:

Since microfinance banks often provide credit without much collateral, these institutions must minimize the risk of client default. These banks face high operational costs employing loan officers to visit clients regularly, sometimes in remote areas.  Finding a reliable and accurate mechanism for identifying clients with low default risk is critical for maintaining a sustainable bank.  However, traditional loan application models that use quantitative data like client repayment history, salary, and assets, may overlook potentially creditworthy applicants at the bottom of the pyramid who may be taking formal loans for the first time.  This evaluation assesses the effectiveness of a new credit risk model, incorporating qualitative data, in predicting repayment and studies its influence on loan committees’ application decisions.

For additional information on current SME Initiative projects, click here.

Context of the Evaluation:

Bancamía is a Colombian microfinance bank that has developed a credit risk model to streamline its loan application process. This risk model incorporates the bank’s historic quantitative data with new qualitative data, like loan officer perceptions, to automatically approve creditworthy clients. Bancamía’s unique system of standardizing qualitative indicators to be used in the model’s algorithm was created to target clients who might otherwise be rejected by a more traditional model. The goal of this statistical modeling system is to improve identification of the best and worst clients, while decentralizing the loan committee process and reducing costs.

Description of the Intervention:

This pilot will assess how the score produced by a credit risk model influences loan committees’ decisions to accept or reject applicants, as well as how accurate the model predicts loan performance of approved clients. Bancamía’s credit risk model is designed to produce a score and application decision by calculating the probability of default based on quantitative and qualitative characteristics collected by loan officers.

Branch directors and loan officers at the eight participating bank branches were invited to a short training workshop before the implementation of the pilot. The training presentations covered topics such as: explanation and importance of a credit risk model, development of the Bancamía tool, and objectives of researching the accuracy of the credit risk model in predicting client performance.

After the training, credit committees, consisting of a branch director, loan officer who collected applicant information, and one or two additional loan officer witnesses, met to review and discuss loan applications. During the meetings, IPA research staff used a mechanism that randomly assigned each of the applications to an information treatment: score from the model presented before the discussion about the application, score from the model presented after a preliminary decision on the application had been made, and a comparison group (no information). Research staff was responsible for providing the credit risk score information at the assigned time and recording final and intermediate (second treatment group) application decision with details of approved and requested loan amounts.  After each application decision, both branch directors and loan officers (some of whom collected the original client data) on the committee completed forms describing their perceptions of the loan decision. Over a period of six months, about 1700 applications were reviewed, with about 550 reviews in each information treatment group. The loan performance of approved clients will be collected over a 10-16 month period and will be used to analyze the impact of the different information treatments. Loan portfolio data will also be collected from eight other comparison branches of Bancamía. Results from this pilot will inform a full scale randomized evaluation.

Results and Policy Lessons:

Results forthcoming.

 

Antoinette Schoar

Feasibility and Impact of Malaria Diagnostics in Ugandan Drug Shops

Malaria is one of the most common causes of illness in Sub-Saharan Africa. The standard first response to a suspected malaria episode is to purchase over-the-counter medication from a local pharmacy, bypassing the formal health care system altogether. Evidence is emerging that a large share of illnesses for which antimalarial medication is taken are not in fact malaria, but are rather bacterial or viral infections. A high rate of inappropriate treatment is problematic because it delays proper diagnosis and treatment for the true cause of illness, wastes precious resources (such as antimalarial subsidies) and possibly accelerates antimalarial drug resistance.

This study explores a method to increase access to affordable malaria diagnostics through retail sector drug shops. We investigate supplier incentives to sell and customer incentives to purchase rapid diagnostic tests (RDTs) for malaria in drug shops in Eastern Uganda. We sell heavily subsidized RDTs to drug shops and allow them to set the price, while simultaneously experimenting with methods to increase customer demand through behavior change communication messaging and social learning. The study also experimentally varies training modules for drug shop owners, in some cases emphasizing their role as primary health care providers in remote communities with poor access to the formal public health system. Finally, we exploit Uganda’s underlying variation in malaria endemicity to explore how financial incentives to sell RDTs are influenced by expected malaria positivity in an effort to understand the circumstances in which RDT subsidies can be most cost-effective.

Jessica Cohen, Gunther Fink

Contract Farming, Technology Adoption and Agricultural Productivity: Evidence from Small Scale Farmers in Western Kenya

Researchers study how cash advances and information delivered via text messages, can encourage farmers to adopt efficient agricultural practices and new crop varieties.

Policy Issue:

Many farmers in the developing world practice subsistence farming, a mode of agriculture in which a plot of land produces only enough food for personal consumption. Moving from pure subsistence crops to high-value cash crops can help poor farmers gain income, by enabling them to sell their produce in markets. However a number of obstacles may prevent subsistence farmers from adopting high-value crops. First, long lag times between effort and rewards may reduce farmers’ willingness and ability to grow certain crops (sugarcane, for example, has an 18 month average harvest cycle in Kenya, the country targeted by the study). Second, it can be costly to diffuse information about high-value crops.

Context:

The Mumias Sugar Company (MSC), a leading sugar producer in Kenya, is located in Mumias District, in Kenya’s Western Province. MSC has the largest sugarcane factory in Kenya, and works with approximately 70,000 out-grower farmers, whose plots encompass an area of 400 square kilometers, in several districts in the province. The company is strongly dedicated to innovation and experimentation. Over the past decade, the MSC agronomy department has been active in testing new cane varieties, fertilizers, and herbicides.

Description of Intervention:

Researchers partnered with the Mumias Sugar Company (MSC) to work with smallholder farmers who, as out-growers, sell sugarcane to the firm. Working with the company management, researchers will explore three interventions: (i) cash advances conditional on farmers' performance at intermediate stages of the harvest cycle, (ii) cell-phone text-message reminders.

The first intervention will introduce rewards for intermediate outcomes for a subsample of farmers. MSC field assistants will assess fertilizer application and weeding accuracy. If credit constraints play a large role, anticipated payments tied to intermediate outcomes should increase farmers’ effort and plot management quality.

The second intervention will aim to reduce costs and information problems related to extension services. Researchers will exploit the large number of cell phones in the area of study (MSC estimates that 70 % of farmers have access to a cell phone) and use them to deliver information about agricultural practices. Together with MSC agronomists, researchers will develop an SMS reminder system. Reminders will concern planting, weeding, fertilizer and herbicide application, cane fire prevention, and harvesting.

The evaluation will assess the impact of the treatments on plot management quality,  good agricultural practices knowledge, yields and crop variety adoption.

Results:

Results forthcoming.

 

Lorenzo Casaburi, Michael Kremer, Sendhil Mullainathan
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