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Though formal and informal sex work has long been identified as crucial for the spread of HIV/AIDS, the nature of the sex-for-money market remains poorly understood. Using a unique panel dataset constructed from 192 self-reported diaries, we find that women who engage in transactional sex substantially increase their supply of risky, better compensated sex to cope with unexpected health shocks, particularly the illness of another household member. These behavioral responses entail significant health risks for these women and their partners, and suggest that these women are unable to cope with risk through other consumption smoothing mechanisms.
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January 01, 2011
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We use two natural field experiments and surveys to identify character elements, and test whether these traits can be used to predict the likelihood of loan default. In the first experiment we identify subjects with high psychosomatic moral costs by observing their reactions when a bank error is made in their favor. In the second experiment we identify subjects that were less naïve about their own ability to meet future commitments. We found that both individuals with higher moral costs and individuals who were the least naïve displayed lower default rates than other groups. We also explore the relationship between qualitative survey-based social capital measures and loan default. We find that survey-based social capital measures are not predictive of loan default for these individual loans, contrary to the results from a prior study -with group loans. Lastly, we examine whether more general personality index measures predict default, and we find that they do not. Overall, the lessons...
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Working Paper
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January 01, 2011
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The controversy over how much to charge for health products in the developing world rests, in part, on whether higher prices can increase use, either by targeting distribution to high-use households (a screening effect), or by stimulating use psychologically through a sunk-cost effect. We develop a methodology for separating these two effects. We implement the methodology in a field experiment in Zambia using door-to-door marketing of a home water purification solution. We find evidence of economically important screening effects. By contrast, we find no consistent evidence of sunk-cost effects.
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December 01, 2010
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This report presents an analysis of land and property conflicts in rural Liberia, using two recently developed sources of data: 1) qualitative data on land tenure and land conflict in Lofa County collected by the Norwegian Refugee Council’s (NRC) Monitoring and Evaluation team; and 2) quantitative baseline survey data on land tenure and land conflict in three rural counties collected by the Yale University / Innovation for Poverty Action evaluation of the Peace Education and Community Empowerment (PEACE) programme in Liberia. The purpose of this analysis is to examine why and how land conflicts develop and the effectiveness of different dispute resolution methodologies in resolving land conflicts. Insights developed through this analysis will be used to evaluate the effectiveness of the NRC’s Information, Counseling and Legal Assistance project in Liberia and disseminated to inform the design and development of similar land and property dispute resolution programmes elsewhere in the wo...
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Report
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November 01, 2010
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Little is known about the impacts of military service on human capital and labor market outcomes due to an absence of data as well as sample selection: recruits are self-selected, screened, and selectively survive. We examine the case of Uganda, where rebel recruitment methods provide exogenous variation in conscription. Economic and educational impacts are widespread and persistent: schooling falls by nearly a year, skilled employment halves, and earnings drop by a third. Military service seems to be a poor substitute for schooling. Psychological distress is evident among those exposed to severe war violence and is not limited to ex-combatants.
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November 01, 2010
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We designed and tested a voluntary commitment product to help smokers quit smoking. The product (CARES) offered smokers a savings account in which they deposit funds for six months, after which they take a urine test for nicotine and cotinine. If they pass, their money is returned; otherwise, their money is forfeited to charity. Eleven percent of smokers offered CARES tookup, and smokers randomly offered CARES were 3 percentage points more likely to pass the 6-month test than the control group. More importantly, this effect persisted in surprise tests at 12 months, indicating that CARES produced lasting smoking cessation. Research brief is available here.
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October 01, 2010
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Microfinance banks use group-based lending contracts to strengthen borrowers' incentives for diligence, but the contracts are vulnerable to free-riding and collusion. We systematically unpack microfinance mechanisms through ten experimental games played in an experimental economics laboratory in urban Peru. Risk-taking broadly conforms to theoretical predictions, with dynamic incentives strongly reducing risk-taking even without group-based mechanisms. Group lending increases risk-taking, especially for risk-averse borrowers, but this is moderated when borrowers form their own groups. Group contracts benefit borrowers by creating implicit insurance against investment losses, but the costs are borne by other borrowers, especially the most risk averse. Access the Briefing Note here. 
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July 01, 2010
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We analyze a randomized trial of a program that rewarded Kenyan primary school teachers based on student test scores, with penalties for students not taking the exams. Scores increased on the formula used to reward teachers, and program school students scored higher on the exams linked to teacher incentives. Yet most of the gains were focused on the teacher reward formula. The dropout rate was unchanged. Instead, exam participation increased among enrolled students. Test scores increased on exams linked to the incentives, but not on other, unrelated exams. Teacher attendance and homework assignment were unaffected, but test preparation sessions increased.
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July 01, 2010
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A decade ago, many in the development community acted with the best of intentions, but without the best of evidence. If households lack clean water, help build wells; if people suffer ill health, improve health services; if the poor lack capital to start businesses, give them credit. Reality is more complicated than the best intentions allow. Well water can be contaminated, people don’t always use their local clinic, and savings or insurance for some may be better then credit. When resources are limited (and when aren’t they?), we should strive to do the most good with the resources we have.
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Annual Report
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July 01, 2010
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This article presents the results from an experimental evaluation of a voluntary health insurance program for informal sector workers in Nicaragua. Costs of the premiums as well as enrollment location were randomly allocated. Overall, take-up of the program was low, with only 20% enrollment. Program costs and streamlined bureaucratic procedures were important determinants of enrollment. Participation of local microfinance institutions had a slight negative effect on enrollment. One year later, those who received insurance substituted toward services at covered facilities and total out-of-pocket expenditures fell. However, total expenditures fell by less than the insurance premiums. We find no evidence of an increase in health-care utilization among the newly insured. We also find very low retention rates after the expiration of the subsidy, with less than 10% of enrollees still enrolled after one year. To shed light on the findings from the experimental results, we present qualitative...
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June 30, 2010
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This paper uses a public economics framework to review evidence from randomized trials on domestic water access and quality in developing countries and to assess the case for subsidies. Water treatment can cost-effectively reduce reported diarrhea. However, many consumers have low willingness to pay for cleaner water; few households purchase household water treatment under retail models. Free point-of-collection water treatment systems designed to make water treatment convenient and salient can generate take-up of approximately 60%at a projected cost as low as $20 per year of life saved, comparable to vaccine costs. In contrast, the limited existing evidence suggests that many consumers value better access to water, but it does not yet demonstrate that better access improves health. The randomized impact evaluations reviewed have also generated methodological insights on a range of topics, including (a) the role of survey effects in health data collection, (b) methods to test for sunk-...
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June 15, 2010
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Objective To assess the efficacy of modest non-financial incentives on immunisation rates in children aged 1-3 and to compare it with the effect of only improving the reliability of the supply of services.   Design Clustered randomised controlled study.   Setting Rural Rajasthan, India.   Participants 1640 children aged 1-3 at end point.   Interventions 134 villages were randomised to one of three groups: a once monthly reliable immunisation camp (intervention A; 379 children from 30 villages); a once monthly reliable immunisation camp with small incentives (raw lentils and metal plates for completed immunisation; intervention B; 382 children from 30 villages), or control (no intervention, 860 children in 74 villages). Surveys were undertaken in randomly selected households at baseline and about 18 months after the interventions started (end point).   Main outcome measures Proportion of children aged 1-3 at the end point who were partially or fully immunised.   Results Among children a...
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May 19, 2010
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This article presents an experiment in which 49 Indonesian villages were randomly assigned to choose development projects through either representative-based meetings or direct election-based plebiscites. Plebiscites resulted in dramatically higher satisfaction among villagers, increased knowledge about the project, greater perceived bene?ts, and higher reported willingness to contribute. Changing the political mechanism had much smaller effects on the actual projects selected, with some evidence that plebiscites resulted in projects chosen by women being located in poorer areas. The results suggest that direct participation in political decision making can substantially increase satisfaction and legitimacy.
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May 01, 2010
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Identity theft is a common crime the world over. In developing countries, the damage caused by identity theft and identity fraud goes far beyond the individual victim, however, and ultimately creates a direct impediment to progress, particularly in credit markets. Recent research reveals that biometric technology can help reduce these problems.
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Brief
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May 01, 2010
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Female “empowerment” has increasingly become a policy goal, both as an end to itself and as a means to achieving other development goals. Microfinance in particular has often been argued, but not without controversy, to be a tool for empowering women. Here, using a randomized controlled trial, we examine whether access to and marketing of an individually held commitment savings product lead to an increase in female decision-making power within the household. We find positive impacts, particularly for women who have below median decision-making power in the baseline, and we find this leads to a shift toward female-oriented durables goods purchased in the household.
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March 30, 2010
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This paper shows how the productive interplay of theory and experimental work has furthered our understanding of credit markets in developing countries. Descriptive facts motivated a body of theory, which in turned motivated experiments designed to test it. Results from these experiments reveal both the success and the limits of the theory, prompting new work to refine it. We argue that the literature on credit can be a template research in other domains.
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Working Paper
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March 01, 2010
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Firms spend billions of dollars developing advertising content, yet there is little field evidence on how much or how it affects demand. We analyze a direct mail field experiment in South Africa implemented by a consumer lender that randomized advertising content, loan price, and loan offer deadlines simultaneously. We find that advertising content significantly affects demand. Although it was difficult to predict ex ante which specific advertising features would matter most in this context, the features that do matter have large effects. Showing fewer example loans, not suggesting a particular use for the loan, or including a photo of an attractive woman increases loan demand by about as much as a 25% reduction in the interest rate. The evidence also suggests that advertising content persuades by appealing “peripherally” to intuition rather than reason. Although the advertising content effects point to an important role for persuasion and related psychology, our deadline results do no...
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February 10, 2010
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What capital is missing in developing countries? We put forward “managerial capital”, which is distinct from human capital, as a key missing form of capital in developing countries. And it has also been curiously missing in the research on growth and development. We argue in this paper that lack of managerial capital has broad implications for firm growth as well as the effectiveness of other input actors. A large literature in development economics aims to understand the impediments to firm growth, particularly small and medium enterprises. Standard growth theories have explored the importance of input factors such as capital and labor in the production function of firms and countries.
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Working Paper
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January 01, 2010
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Expanding access to commercial credit is a key ingredient of development strategiesworldwide. There is less consensus on the role of consumer credit, particularly when extended at high interest rates. Popular skepticism about “unproductive” and “usurious” lending is fueled by academic work highlighting behavioral biases that induce overborrowing. We estimate the impacts of expanding access to consumer credit at 200% APR using a field experiment and follow-up survey and administrative data. The randomly assigned marginal loans produced significant net benefits for borrowers across a wide range of outcomes. There is also some evidence that the marginal loans were profitable.
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January 01, 2010

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