English
We use a randomized experiment and a structural model to test whether monitoring and financial incentives can reduce teacher absence and increase learning in India. In treatment schools, teachers’ attendance was monitored daily using cameras, and their salaries were made a nonlinear function of attendance. Teacher absenteeism in the treatment group fell by 21 percentage points relative to the control group, and the children’s test scores increased by 0.17 standard deviations. We estimate a structural dynamic labor supply model and find that teachers respond strongly to financial incentives. Our model is used to compute cost-minimizing compensation policies.
Country:
Program area:
Type:
Published Paper
Date:
December 01, 2012
English
Connecting private dwellings to the water main is expensive and typically cannot be publicly financed. We show that households' willingness to pay for a private connection is high when it can be purchased on credit, not because a connection improves health but because it increases the time available for leisure and reduces inter- and intra-household conflicts on water matters, leading to sustained improvements in well-being. Our results suggest that facilitating access to credit for households to finance lump sum quality-oflife investments can significantly increase welfare, even if those investments do not result in any health or income gains.
Country:
Program area:
Type:
Published Paper
Date:
November 01, 2012
English
This paper examines the effects of learning HIV status on economic behavior among rural Malawians. According to economic life-cycle models, if learning HIV results is informative about additional years of life, being diagnosed HIV-positive or negative should predict changes in consumption, investment and savings behavior with important micro and macro-economic implications. Using an experiment that randomly assigned incentives to learn HIV results, I find that while learning HIV results had short term effects on subjective belief of HIV infection, these differences did not persist after two years. Consistent with this, there were relatively few differences two years later in savings, income, expenditures, and employment between those who learned and did not learn their status.
Authors:
Country:
Program area:
Type:
Published Paper
Date:
November 01, 2012
Spanish
Nuevos hallazgos del Banco Interamericano de Desarrollo sobre el pensamiento crítico en la educación pre-primaria y primaria.
Country:
Program area:
Type:
Brief
Date:
October 09, 2012
English
We implemented a randomized field experiment in Malawi examining borrower responses to being fingerprinted when applying for loans. This intervention improved the lender’s ability to implement dynamic repayment incentives, allowing it to withhold future loans from past defaulters while rewarding good borrowers with better loan terms. As predicted by a simple model, fingerprinting led to substantially higher repayment rates for borrowers with the highest ex ante default risk, but had no effect forthe rest of the borrowers. We provide unique evidence that this improvement in repayment rates is accompanied by behaviors consistent with less adverse selection and lower moral hazard.
Country:
Program area:
Type:
Published Paper
Date:
October 01, 2012
English
In developing countries, unexpected income shocks are common but informal insurance is typically incomplete. An important question is therefore whether risk-sharing within the household is effective. This paper presents results from a field experiment with 142 married couples in Kenya in which individuals were given random income shocks. Even though the shocks were small relative to lifetime income, men increase private consumption when they receive the shock but not when their wives do, a rejection of efficiency. Such behavior is not specific to the experiment—both spouses spend more on themselves when their labor income is higher.
Country:
Program area:
Type:
Published Paper
Date:
October 01, 2012
English
Financial stress is widely believed to cause health problems. However, policies seeking to relieve financial stress by limiting debt levels of poor households may directly worsen their economic well-being. We evaluate an alternative policy – increasing the repayment flexibility of debt contracts. A field experiment randomly assigned microfinance clients to a monthly or a traditional weekly installment schedule (N = 200). We used cell phones to gather survey data on income, expenditure, and financial stress every 48 hours over seven weeks. Clients repaying monthly were 51 percent less likely to report feeling ‘‘worried, tense, or anxious’’ about repaying, were 54 percent more likely to report feeling confident about repaying, and reported spending less time thinking about their loan compared to weekly clients. Monthly clients also reported higher business investment and income, suggesting that the flexibility encouraged them to invest their loans more profitably, which ultimately reduce...
Country:
Program area:
Type:
Published Paper
Date:
September 26, 2012
English
In today’s knowledge-based societies, understanding basic scientific concepts and the capacity to structure and solve scientific questions is more critical than ever. Accordingly, in this paper we test an innovative methodology for teaching science and environment in public primary schools where traditional (teacher centred) teaching was replaced with student centred activities using LEGO kits. We document positive and significant improvements of 0.18 standard deviations in standardised test scores. Such positive results are mainly concentrated within boys that were located above the median of baseline academic performance.
Country:
Program area:
Type:
Working Paper
Date:
September 15, 2012
English
Protecting naturally occurring springs with simple infrastructure significantly improved source water quality and reduced the incidence of diarrhea in young children by one-quarter.
Country:
Program area:
Topics:
Type:
Brief
Date:
September 01, 2012
English
Many basic economic theories with perfectly functioning markets do not predict the existence of the vast number of microenterprises readily observed across the world. We put forward a model that illuminates why financial and managerial capital constraints may impede experimentation, and thus limit learning about the profitability of alternative firm sizes. The model shows how lack of information about one’s own type, but willingness to experiment to learn one’s type, may lead to short-run negative expected returns to investments on average, with some outliers succeeding. To test the model we put forward first a motivating experiment from Ghana, and second a small meta-analysis of other experiments. In the Ghana experiment, we provide inputs to microenterprises, specifically financial capital (a cash grant) and managerial capital (consulting services), to catalyze adoption of investments and practices aimed towards enterprise growth. We find that entrepreneurs invest the cash, and take...
Country:
Type:
Working Paper
Date:
August 01, 2012
English
It is often argued that cost-sharing—charging a subsidized, positive price—for a health product is necessary to avoid wasting resources on those who will not use or do not need the product. We explore this argument through a field experiment in Kenya, in which we randomized the price at which prenatal clinics could sell long-lasting antimalarial insecticide-treated bed nets (ITNs) to pregnant women. We find no evidence that cost-sharing reduces wastage on those who will not use the product: women who received free ITNs are not less likely to use them than those who paid subsidized positive prices. We also find no evidence that costsharing induces selection of women who need the net more: those who pay higher prices appear no sicker than the average prenatal client in the area in terms of measured anemia (an important indicator of malaria). Cost-sharing does, however, considerably dampen demand. We find that uptake drops by sixty percentage points when the price of ITNs increases from z...
Country:
Program area:
Type:
Published Paper
Date:
July 25, 2012
English
Improved cookstoves in India did not reduce smoke exposure, improve health, or reduce fuel usage of recipients because they were not used regularly and recipients did not invest to maintain them properly. Nearly half of the world’s population continues to rely on solid fuels, including wood, dung, agricultural waste, and coal, for its energy needs. The smoke released from using such fuels has been shown to lead to respiratory diseases and lung cancer. The World Health Organization (WHO) lists indoor air pollution as the “leading environmental cause of death in the world,” stating that it contributes to two million deaths annually. Cooking with biomass fuels also contributes to climate change: Using biomass fuels releases carbon dioxide (CO2) and black carbon into the atmosphere and also plays a role in deforestation. Improved cooking stoves have been promoted as a simple solution to these problems. Based on their technical design, improved stoves have the potential to reduce emissions,...
Country:
Program area:
Topics:
Type:
Brief
Date:
July 01, 2012
English
2012 was a year of intense focus on the key components of our mission: creating evidence about what works for the poor through rigorous research, and translating this evidence into practice and policy.
Country:
Type:
Annual Report
Date:
July 01, 2012
English
This paper studies the causal impact of credit constraints on exporting firms. We exploit a natural experiment provided by two policy changes in India, first in 1998 which made small-scale firms eligible for subsidized direct credit, and a subsequent reversal in policy in 2000 wherein some of these firms lost their eligibility. Using firms that were not affected by these policy changes (in each case) as our control group, we find that expansion of subsidized credit increased the rate of growth of bank borrowing by about 20 percent and export earnings by around 22 percent. Interestingly, the subsequent policy reversal in 2000 had no impact on the rate of growth of bank borrowing and on export earnings.
Country:
Type:
Working Paper
Date:
June 17, 2012
English
We use a randomized experiment and a structural model to test whether monitoring and financial incentives can reduce teacher absence and increase learning in India. In treatment schools, teachers' attendance was monitored daily using cameras, and their salaries were made a nonlinear function of attendance. Teacher absenteeism in the treatment group fell by 21 percentage points relative to the control group, and the children's test scores increased by 0.17 standard deviations. We estimate a structural dynamic labor supply model and find that teachers respond strongly to financial incentives. Our model is used to compute cost-minimizing compensation policies.
Country:
Program area:
Type:
Published Paper
Date:
June 01, 2012
English
Are minorities treated differently by the legal system? Systematic racial differences in case characteristics, many unobservable, make this a difficult question to answer directly. In this paper, we estimate whether judges differ from each other in how they sentence minorities, avoiding potential bias from unobservable case characteristics by exploiting the random assignment of cases to judges. We measure the between-judge variation in the difference in incarceration rates and sentence lengths between African-American and White defendants. We perform a Monte Carlo simulation in order to explicitly construct the appropriate counterfactual, where race does not influence judicial sentencing. In our data set, which includes felony cases from Cook County, Illinois, we find statistically significant between-judge variation in incarceration rates, although not in sentence lengths.
Country:
Program area:
Type:
Published Paper
Date:
June 01, 2012
English
Like many developing countries, the Philippines has made considerable progress toward the Millennium Development Goal of universal access to primary school: In 2008, the country achieved a 92 percent primary school enrollment rate. However, the challenge for education policy does not end with increasing enrollment and filling classrooms. Helping schools find cost-effective ways to improve student learning is also vitally important in light of the resource constraints that many school systems face. Literacy is an especially critical skill, given the importance of reading for learning in every subject, for future employment, and for children’s ability to navigate successfully through life. Simply providing more resources without changing the learning environment has not proven effective in improving most children’s reading skills, so more innovative approaches are required. A randomized evaluation by Ama Baafra Abeberese (Columbia University), Todd J. Kumler (Columbia University), and J-...
Country:
Program area:
Type:
Brief
Date:
June 01, 2012
English
This article presents results of innovative surveys that tracked academic high achievers from five countries to wherever they moved in the world to directly measure at the micro level the channels through which high-skilled emigration affects sending countries. There are high levels of emigration and of return and the income gains to the best and brightest from migrating are an order of magnitude greater than any other effect. Most high-skilled migrants from poorer countries remit but involvement in trade and foreign direct investment is rare. Fiscal costs vary widely but are much less than the benefits to the migrants themselves.
Program area:
Type:
Published Paper
Date:
May 01, 2012
English
Mounting evidence suggests that behavioral factors depress wealth accumulation. Although much research and policy focuses on asset accumulation, for many households debt decumulation is more efficient. Yet the mass market for debt reduction services is thin. So we develop and pilot test Borrow Less Tomorrow (BoLT), a behavioral approach to debt reduction that combines a simple decision aid, social commitment, and reminders. Results from a sample of free tax-preparation clients with eligible debt in Tulsa (N=465) indicate strong demand for debt reduction: 41% of those offered BoLT used it to make a plan to accelerate debt repayment. Using random assignment to BoLT offers, we find weak evidence that the BoLT package offered reduces credit card debt.
Country:
Topics:
Type:
Working Paper
Date:
May 01, 2012
English
Biomass combustion with traditional cookstoves causes substantial environmental and health harm. Nontraditional cookstove technologies can be efficacious in reducing this adverse impact, but they are adopted and used at puzzlingly low rates. This study analyzes the determinants of low demand for nontraditional cookstoves in rural Bangladesh by using both stated preference (from a nationally representative survey of rural women) and revealed preference (assessed by conducting a cluster-randomized trial of cookstove prices) approaches. We find consistent evidence across both analyses suggesting that the women in rural Bangladesh do not perceive indoor air pollution as a significant health hazard, prioritize other basic developmental needs over nontraditional cookstoves, and overwhelmingly rely on a free traditional cookstove technology and are therefore not willing to pay much for a new nontraditional cookstove. Efforts to improve health and abate environmental harm by promoting nontradi...
Country:
Program area:
Type:
Published Paper
Date:
May 01, 2012

Pages