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Asymmetric information can be costly in insurance markets and can even hinder market development, as is the case for most agricultural insurance markets. I study information asymmetries in crop insurance in the Philippines using a randomized field experiment. Using a combination of preference elicitation, a two-level randomized allocation of insurance and detailed data collection, I test for and find evidence of adverse selection, moral hazard and their interaction – that is, selection on anticipated moral hazard behavior. I conclude that information asymmetry problems are substantial in this context and that variations on this experimental design may be useful in future work for identifying interactions between choice and treatment effects.

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Working Paper
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September 07, 2016
English

We worked with two microlenders to test impacts of randomly assigned reminders for loan repayments in the “text messaging capital of the world”. We do not find strong evidence that loss versus gain framing or messaging timing matter. Messages only robustly improve repayment when they include the loan officer’s name. This effect holds for clients serviced by the loan officer previously but not for first-time borrowers. Taken together, the results highlight the potential and limits of communications technology for mitigating moral hazard, and suggest that personal obligation/reciprocity between borrowers and bank employees can be harnessed to help overcome market failures.

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Working Paper
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August 01, 2016
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We provide evidence from field experiments with three different banks, that reminder messages increase commitment attainment for clients who recently opened commitment savings accounts. Messages that mention both savings goals and financial incentives are particularly effective, while other content variations such as gain versus loss framing do not have significantly different effects. Nor do we find evidence that receiving additional late reminders has an additive effect. These empirical results do not map neatly into existing models, so we provide a simple model where limited attention to exceptional expenses can generate under-saving that is in turn mitigated by reminders.

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Published Paper
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January 19, 2016
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Significant income gains from migrating from poorer to richer countries have motivated unilateral (source-country) policies facilitating labor emigration. However, their effectiveness is unknown. We conducted a large-scale randomized experiment in the Philippines testing the impact of unilaterally facilitating international labor migration. Our most intensive treatment doubled the rate of job offers but had no identifiable effect on international labor migration. Even the highest overseas job-search rate we induced (22%) falls far short of the share initially expressing interest in migrating (34%). We conclude that unilateral migration facilitation will at most induce a trickle, not a flood, of additional emigration.

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Published Paper
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November 10, 2015
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There is a disconnect between academic economists’ search for individual mechanisms that constrain firm growth and the more complex reality facing firms and policymakers aiming to alleviate these constraints. The comprehensive, some would say scattershot, approaches that are common in practice are considered challenging for evaluators because of the difficulty in identifying any particular causal mechanism. More targeted attempts to improve business performance typically generate mixed performance (McKenzie and Woodruff 2012) or do not seem to scale either in the market or with public support.

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May 28, 2015

There is a disconnect between academic economists’ search for individual mechanisms that constrain firm growth and the more complex reality facing firms and policymakers aiming to alleviate these constraints. The comprehensive, some would say scattershot, approaches that are common in practice are considered challenging for evaluators because of the difficulty in identifying any particular causal mechanism. More targeted attempts to improve business performance typically generate mixed performance (McKenzie and Woodruff 2012) or do not seem to scale either in the market or with public support.

With that in mind, we partnered with the Asian Institute of Management (AIM), a leading Philippine business school, to launch a classbased program that had MBA students providing consulting services for local small and medium enterprises.

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May 01, 2015

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