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Despite good intentions, people often make less-than-optimal financial choices. In this series, we match insights from our global research in behavioral economics with specific financial service and product design opportunities both for providers in the U.S. and in other countries. Providers can use these evidence-based insights to expand financial inclusion, improve client offerings, and continue to promote financial health. This booklet combines a series of briefs, which are also available to download as individual briefs: Count on Commitment, The Power of Doing Nothing, Top of Mind. Count on CommitmentCommitment devices are voluntary, binding arrangements that people make to reach specific goals that may otherwise be difficult to achieve. When built into savings products, commitment devices can help address behavioral and social obstacles to saving by providing a mechanism that forces people to save according to their self-set plans. These devices vary in terms of commitment activi...
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Brief
Date:
February 13, 2017
Letter
Financial education is widely used by governments, financial service providers, and non-governmental organizations as a tool to help people navigate the financial system and make better financial choices. Financial education programs are built on the assumption that education will lead to knowledge, and that knowledge will lead to better choices and improved financial health. Recent evidence suggests that assumption is flawed, but also shows promise for some new, alternative approaches to financial education. A robust body of evidence shows that on average conventional approaches to financial education have not been successful in either imparting lasting knowledge or in changing people’s financial behavior. While these findings may seem discouraging at first glance, the conventional approach to financial education is not the only approach, and several new methods have been rigorously tested in recent years and yielded positive results. This brief explores the emerging evidence on these...
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Brief
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January 27, 2017
English
IPA is synonymous with impact. We’re known for both measuring impact and using those results to impact people’s lives. In 2015, we further improved our research quality and grew in research quantity, and we began new efforts to share results to improve programs and policies for the poor. Since our founding in 2002, IPA has worked with over 400 leading academics to conduct over 600 evaluations in 51 countries. This research has informed hundreds of successful programs that now impact millions of individuals worldwide. Browse an online version of the report here: annualreport.poverty-action.org
Type:
Annual Report
Date:
September 12, 2016
English
Reminders can increase savings deposits at almost no cost to providers Despite good intentions, people often make less-than-optimal financial choices. In this series, we match insights from our global research in behavioral economics with specific financial product and service opportunities for U.S. providers. Providers can use these evidence-based insights to expand financial inclusion, improve client offerings, and continue to promote financial health. Providing access to savings accounts is an important step in bringing financial services to the poor, but access alone does not guarantee people will save. Many people struggle to develop good savings habits because they put off saving until a future time, or face so many seemingly urgent needs today that it is difficult to save for tomorrow, or they simply forget to save. Reminders that bring savings goals to the “top of mind” are a low-cost way to address these barriers and help clients reach their savings goals. This brief is part o...
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Brief
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February 13, 2017
English
How defaults can improve customer savings behavior Despite good intentions, people often make less-than-optimal financial choices. In this series, we match insights from our global research in behavioral economics with specific financial product and service opportunities for U.S. providers. Providers can use these evidence-based insights to expand financial inclusion, improve client offerings, and continue to promote financial health. Automatic (“opt-out”) enrollment is a simple product design modification in which consumers are informed they will be automatically enrolled in a product or service unless they choose to opt out. Setting the default to “opt-out” instead of “opt-in” has been shown to significantly increase uptake of certain savings products and lead to behavior change through automation, for example by increasing participation in retirement and savings plans. It is important that financial services providers use these tools with care, fully and conspicuously inform their c...
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Brief
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February 13, 2017
English
Helping clients stick to their goals and increase their savings balances with commitments Despite good intentions, people often make less-than-optimal financial choices. In this series, we match insights from our global research in behavioral economics with specific financial product and service opportunities for U.S. providers. Providers can use these evidence-based insights to expand financial inclusion, improve client offerings, and continue to promote financial health. Commitment devices are voluntary, binding arrangements that people make to reach specific goals that may otherwise be difficult to achieve. When built into savings products, commitment devices can help address behavioral and social obstacles to saving by providing a mechanism that forces people to save according to their self-set plans. These devices vary in terms of commitment activity, consequence for failing to fulfill the commitment, and control over how savings are spent. “Hard” commitments feature financial pen...
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Brief
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February 13, 2017
English
This paper presents an experimental approach to study competition in agricultural markets, based on the random allocation of subsidies to crop traders. We compare prices of subsidized and unsubsidized traders to recover the key competition parameter in a standard model of imperfect competition. In addition, by combining the experimental results with quasi-experimental estimates of the pass-through rate, we estimate the effective number of traders competing in a location, or, the market size. In the context of the Sierra Leone cocoa industry, our results point at a competitive trading sector and suggest that the market size is substantially larger than the village. The methodology developed in this paper uses purely individual-level randomization to shed light on market structure. This approach may be useful for the many cases in which market-level randomization is not feasible.
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Working Paper
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February 01, 2017
A4
In the Philippines, we have continued our global tradition of rigorous, applicable research by building foundational research capacity and conducting evaluations in areas of pressing national concern. Two completed evaluations offer promising insights into everyday issues that affect the lives of the Filipino poor.
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Brief
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February 01, 2017
English
Many students arrive at primary school already behind, experiencing a lack of skills that may compromise their long-term learning and wellbeing. In Accra, Ghana, researchers evaluated the impact of an affordable, in-service kindergarten teacher training, with and without a parental awareness program. Results showed that the training improved the number of the play-based, child-friendly activities teachers used and improved the quality of teacher-child interactions. However, adding the parent education component had a negative effect on teachers’ use of emotional support and positive behavior management, and a small negative effect on child outcomes.
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Brief
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January 23, 2017
English
Distributing subsidized health products through existing health infrastructure could substantially and cost-effectively improve health in sub-Saharan Africa. There is, however, widespread concern that poor governance – in particular, limited health worker accountability – seriously undermines the effectiveness of subsidy programs. We audit targeted bednet distribution programs to quantify the extent of agency problems. We find that around 80% of the eligible receive the subsidy as intended, and up to 15% of subsidies are leaked to ineligible people. Supplementing the program with simple financial or monitoring incentives for health workers does not improve performance further and is thus not cost-effective in this context.
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Working Paper
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January 16, 2017
English
Over the past five years, the SME Program at IPA has grown from an ambitious idea to a thriving, prolific, and influential initiative. It is with great enthusiasm that we share this report highlighting some of our accomplishments—which would not have been possible without the collaboration and support of so many of you. Our work began at the end of 2010, when we sat down with leading practitioners and academics working on entrepreneurship and SME growth in developing countries, and assessed the most pressing knowledge gaps in the sector. At the time, only a handful of impact evaluations had been conducted on SME support programs in developing countries, and there was an urgent need for evidence to help guide decision-making. Following that initial event, IPA launched the SME Program (formerly known as the “SME Initiative”), with the goal of addressing the existing knowledge gaps and generating evidence on the most effective solutions to the constraints SMEs face in developing countries...
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Report
Date:
January 12, 2017
English
Three hundred million of the world’s rural poor suffer from seasonal income insecurity, which often occurs between planting and harvest when the demand for agricultural labor falls and the price of food rises. Those who undergo a lean season typically miss meals for a two- to three-month period. This is especially problematic for pregnant women and young children since poor nutrition for even a short time can limit long-term cognitive and physical development. Seasonal hunger and deprivation is perhaps the biggest challenge to the reduction of global poverty that has remained largely under the radar. Members of some families in poor rural areas migrate to urban areas for work to cope with seasonal deprivation. In Bangladesh, however, researchers observed that many vulnerable households, who could potentially reap large benefits from temporary migration, didn’t send anyone away to work, thereby risking hunger. Why weren’t more people migrating? Would these households improve food securi...
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Brief
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December 29, 2016
English
Objectives. To evaluate whether text-messaging programs can improve reproductive health among adolescent girls in low- and middle-income countries. Methods. We conducted a cluster–randomized controlled trial among 756 female students aged 14 to 24 years in Accra, Ghana, in 2014. We randomized 38 schools to unidirectional intervention (n = 12), interactive intervention (n = 12), and control (n = 14). The unidirectional intervention sent participants text messages with reproductive health information. The interactive intervention engaged adolescents in text-messaging reproductive health quizzes. The primary study outcome was reproductive health knowledge at 3 and 15 months. Additional outcomes included self-reported pregnancy and sexual behavior. Analysis was by intent-to-treat. Results. From baseline to 3 months, the unidirectional intervention increased knowledge by 11 percentage points (95% confidence interval [CI] = 7, 15) and the interactive intervention by 24 percentage points (95%...
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Published Paper
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December 20, 2016
English
IPA Zambia is pleased to share with you its final bulletin of the year: "2016 in Review." This bulletin highlights ten of IPA Zambia's research projects, including updates from projects included in the previous bulletin as well as new contributions. We hope you enjoy this look at the high-quality evidence we've generated this past year, and we look forward to continuing this work with you in the year ahead.
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Brief
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December 13, 2016
English
Targeted interventions that sustainably improve the lives of the poor will be a critical component in eliminating extreme poverty by 2030. The poorest households tend to be physically and socially isolated and face disadvantages across multiple dimensions, which makes moving out of extreme poverty challenging and costly. This paper compares the cost-effectiveness of three strands of anti-poverty social protection interventions by reviewing 30 livelihood development programs, 11 lump-sum unconditional cash transfers, and seven graduation programs. All the selected graduation initiatives focused on the extreme poor, while the livelihood development and cash transfer programs targeted a broader set of beneficiaries. Impacts on annual household consumption (or on income when consumption data were not available) per dollar spent were used to benchmark cost-effectiveness across programs. Among all 48 programs reviewed, lump-sum cash transfers were found to have the highest benefit-cost ratio...
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Report
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December 13, 2016
English
We use a field experiment to show referral-based hiring has the potential to disadvantage qualified women, highlighting another potential channel behind gender disparities in the labor market. Through a recruitment drive for a firm in Malawi, we look at men's and women's referral choices under different incentives and constraints. We find that men systematically refer few women, despite being able to refer qualified women when explicitly asked for female candidates. Performance pay also did not alter men's tendencies to refer men. Additionally, women did not refer enough high quality women to offset men's behavior.
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Working Paper
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December 01, 2016
The gains from insurance arise from the transfer of income across states. Yet, by requiring that the premium be paid upfront, standard insurance products also transfer income across time. We show that this intertemporal transfer can help explain low insurance demand, especially among the poor, and in a randomized control trial in Kenya we test a crop insurance product which removes it. The product is interlinked with a contract farming scheme: as with other inputs, the buyer of the crop offers the insurance and deducts the premium from farmer revenues at harvest time. The take-up rate is 72%, compared to 5% for the standard upfront contract, and take-up is highest among poorer farmers. Additional experiments and outcomes indicate that liquidity constraints, present bias and counterparty risk are important constraints on the demand for standard insurance. Finally, evidence from a natural experiment in the United States, exploiting a change in the timing of the premium payment for Federa...
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Working Paper
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December 01, 2016
English
Potential Energy: Monitoring Cookstoves Use Through Environmental Sensors Around the world, 3 billion people cook with biomass, causing over four million annual premature deaths, and generating 30% of global black carbon emissions. In addition to the acute health and environmental effects of biomass cooking, there are economic effects, as women across the developing world spend considerable time and money acquiring fuel. For a family in Sub-Saharan Africa, it can cost between 10-30% of total household income to purchase fuel for cooking fires.  Potential Energy (PE) is a not-for-profit organization with a mission of making cooking safe, and affordable, for women and their families. PE’s core product is the Berkeley-Darfur Stove (BDS), a high-efficiency wood-burning cookstove. As compared to preparing meals over an open fire, the BDS was designed to save users 50% on fuel while reducing cooking time and exposure to smoke. To date, PE’s primary focus has been the distribution of the BDS...
Type:
Goldilocks Toolkit
Date:
November 28, 2016
English
The welfare impact of expanding access to bank accounts depends on whether accounts crowd out pre-existing financial relationships, or whether private gains from accounts are shared within social networks. In this experiment, we provided free bank accounts to a random subset of 885 households. Across households, we document positive spillovers: treatment households become less reliant on grown children and siblings living outside their village, and become more supportive of neighbors and friends within their village. Within households, we randomized which spouse was offered an account and find no evidence of negative spillovers.
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Working Paper
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November 10, 2016
English
We experimentally test the impact of expanding access to basic bank accounts in Uganda, Malawi, and Chile. Over two years, 17 percent, 10 percent, and 3 percent of treatment individuals made five or more deposits, respectively. Average monthly deposits for them were at the 79th, 91st, and 96th percentiles of baseline savings. Survey data show no clearly discernible intention–to–treat effects on savings or any downstream outcomes. This suggests that policies merely focused on expanding access to basic accounts are unlikely to improve welfare noticeably since impacts, even if present, are likely small and diverse.
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Working Paper
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October 31, 2016

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