workfare wellbeing and consumption evidence from a field experiment with kenya s urban poor abstract restrictions like work requirements and constraints on voucher transfers are often used in social welfare systems but little empirical evidence exists on their impact on wellbeing we conducted a 10 day randomized experiment with 432 individuals living below the poverty line in the kawangware settlement of nairobi kenya testing two elements of social welfare design workfare versus welfare and restricted versus unrestricted vouchers participants were randomly assigned to a work condition involving daily work for unrestricted vouchers or one of two wait conditions involving daily waiting for vouchers that were either unrestricted or partially restricted to staple foods we find that working improved psychological wellbeing relative to waiting suggesting that the means of implementing welfare programs may have important effects on individuals beyond the impact of monetary benefit alone furthermore although the restrictions were inframarginal partially restricted vouchers crowded in spending on staple foods suggesting the existence of a flypaper effect in spending from restricted vouchers

a helping hand or the long arm of the law experimental evidence on what governments can do to formalize firms many governments have spent much of the past decade trying to extend a helping hand to informal businesses by making it easier and cheaper for them to formalize much less effort has been devoted to raising the costs of remaining informal through increasing enforcement of existing regulations this paper reports on a field experiment conducted in belo horizonte brazil in order to test which government actions work in getting informal firms to register firms were randomized to a control group or one of four treatment groups the first received information about how to formalize the second received this information and free registration costs along with the use of an accountant for a year the third group was assigned to receive an enforcement visit from a municipal inspector while the fourth group was assigned to have a neighboring firm receive an enforcement visit to see if enforcement has spillovers the analysis finds zero or negative impacts of information and free cost treatments and a significant but small increase in formalization from inspections estimates of the impact of actually receiving an inspection give a 21 to 27 percentage point increase in the likelihood of formalizing the results show most informal firms will not formalize unless forced to do so suggesting formality offers little private benefit to them but the tax revenue benefits to the government of bringing firms of this size into the formal system more than offset the costs of inspections

banking costs generalized functional forms and estimation of economies of scale and scope recently researchers have claimed that the primitive cobb douglas production technology captures banking cost functions adequately these findings rule out scope economies and u shaped cost curves the rejection of the generalized flexible form postulated by the above authors is a necessary but not a sufficient condition to justify a cobb douglas specification using restricted generalized functional forms the authors find that the composite output cobb douglas specification is an inadequate description of banking cost technology translog specifications with multiple products capture the data best suggesting the presence of both scope and scale economies copyright 1989 by ohio state university press

how reliable are household expenditures as a proxy for permanent income implications for the income nutrition relationship using short run expenditures from household surveys as a proxy may create attenuated estimates of the impact of permanent income on economic outcomes we use repeated observations to calculate reliability ratios and estimate errors in variables regressions of the impact of income on nutrition we find significant responses to income in contrast to previous influential studies

the effect of gender targeted conditional cash transfers on household expenditures evidence from a randomized experiment this paper studies the differential effect of targeting cash transfers to men or women on the structure of household expenditures on non durables we study a policy intervention in the republic of macedonia offering cash transfers to poor households conditional on having their children attending secondary school the recipient of the transfer is randomized across municipalities to be either the household head or the mother using data collected to evaluate the conditional cash transfer program we show that the gender of the recipient has an effect on the structure of expenditure shares targeting transfers to women increases the expenditure share on food by about 4 to 5 to study the allocation of expenditures within the food basket we estimate a demand system for food and we find that targeting payments to mothers induces for different food categories not only a significant intercept shift but also a change in the slope of the engel curve

improving management with individual and group based consulting results from a randomized experiment in colombia differences in management quality are an important contributor to productivity differences across countries a key question is how to best improve poor management in developing countries this paper tests two different approaches to improving management in colombian auto parts firms the first uses intensive and expensive one on one consulting while the second draws on agricultural extension approaches to provide consulting to small groups of firms at approximately one third of the cost of the individual approach both approaches lead to improvements in management practices of a similar magnitude 8 10 percentage points so that the new group based approach dominates on a cost benefit basis moreover the paper finds some evidence that the group based intervention led to increases in firm size over the next three years while the impacts on firm outcomes are smaller and statistically insignificant for the individual consulting the results point to the potential of group based approaches as a pathway to scaling up management improvements

the short term impact of unconditional cash transfers to the poor experimental evidence from kenya we use a randomized controlled trial to study the response of poor households in rural kenya to unconditional cash transfers from the ngo givedirectly the transfers differ from other programs in that they are explicitly unconditional large and concentrated in time we randomized at both the village and household levels furthermore within the treatment group we randomized recipient gender wife versus husband transfer timing lump sum transfer versus monthly installments and transfer magnitude us 404 ppp versus us 1 525 ppp we find a strong consumption response to transfers with an increase in household monthly consumption from 158 ppp to 193 ppp nine months after the transfer began transfer recipients experience large increases in psychological well being we find no overall effect on levels of the stress hormone cortisol although there are differences across some subgroups monthly transfers are more likely than lump sum transfers to improve food security whereas lump sum transfers are more likely to be spent on durables suggesting that households face savings and credit constraints together these results suggest that unconditional cash transfers have significant impacts on economic outcomes and psychological well being

comparing cash and voucher transfers in a humanitarian context evidence from the democratic republic of congo despite recent calls in support of cash transfers there is little rigorous evidence of the relative impacts of cash versus in kind transfers especially in humanitarian contexts where a majority of such programs take place this paper uses data from a randomized experiment in the democratic republic of congo to assess the relative impacts and costs of equivalently valued cash and voucher transfers the voucher program distorted households purchases along both the extensive and intensive margin as compared with unconstrained cash households yet there were no differences in food consumption or other measures of well being in part due to the fact that voucher households were able to resell part of what they purchased as there were no significant benefits to vouchers cash transfers were the more cost effective modality for both the implementing agency and program recipients in this context

cash for women s empowerment a mixed methods evaluation of the government of zambia s child grant program summary the empowerment of women broadly defined is an often cited objective and benefit of social cash transfer programs in developing countries despite the promise and potential of cash transfers to empower women the evidence supporting this outcome is mixed in addition there is little evidence from programs at scale in sub saharan africa we conducted a mixed methods evaluation of the government of zambia s child grant program a poverty targeted unconditional transfer given to mothers or primary caregivers of young children aged zero to five the quantitative component was a four year longitudinal clustered randomized control trial in three rural districts and the qualitative component was a one time data collection involving in depth interviews with women and their partners stratified on marital status and program participation our study found that women in beneficiary households were making more sole or joint decisions across five out of nine domains however impacts translated into relatively modest increases in the number of decision domains a woman is involved in on average by 0 34 or a 6 increase over a baseline mean of 5 3 qualitatively we found that changes in intrahousehold relationships were limited by entrenched gender norms which indicate men as heads of household and primary decision makers however women s narratives showed the transfer increased financial empowerment as they were able to retain control over transfers for household investment and savings for emergencies we highlight methodological challenges in using intrahousehold decision making as the primary indicator to measure empowerment results show potential for unconditional cash transfer programs to improve the financial and intrahousehold status of female beneficiaries however it is likely additional design components are need for transformational change

the collapse of purchasing power parities during the 1970 s one of the striking facts concerning the relationship beiveen prices and exchange rates during the 1970 s has been the dismal performance of the predictions of the simple versions of the purchasing power parity doctrine ppp that doctrine in its absolute version states that the equilibrium exchange rate between domestic and foreign currencies equals the ratio of domestic to foreign price levels the relative version of the doctrine relates equilibrium changes in exchange rates to changes in the ratio of domestic to foreign prices during the 1970 s short run changes in exchange rates bore little relationship to short run differentials in national inflation rates and frequently divergences from purchasing power parities have been cumulative this paper reviews and analyzes the empirical record of exchange rates and prices during the 1970 s and the analysis is based on the experience of the dollar pound the dollar frecch franc and the dollar dm exchange rates section 2 presents the evidence on ppp during the 1970 s and contrasts it with the evidence from the 1920 s a period during which the doctrine held up reasonably well this analysis is relevant for assessing whether the flexible exchange rate system was successful in providing national economies with an added degree of insulation from foreign shocks and whether it provided policymakers with an added instrument for the conduct of macroeconomic policy the evidence regarding devia tions from purchasing power parities is also relevant for determining whether there is a case for managed float section 3 attempts to explain what went wrong with

who benefited from burundi s demobilization program this paper assesses the impact of the demobilization reinsertion and reintegration program in post war burundi two major rebel groups benefited from cash and in kind transfers the cndd fdd from 2004 and the fnl from 2010 a panel data of households collected in 2006 and 2010 is combined with official records from the national commission for demobilization reinsertion and reintegration regression analysis shows that the cash payments received by fnl demobilized households had a positive impact on consumption nonfood spending and investments the program also generated positive spillovers in the villages where fnl combatants returned ex combatants indeed spent a large part of their allowance on consumption goods and clothing thereby generating a short run economic boom in villages however the long run evolution of consumption indicators is negative for cndd fdd households as well as for villages where cndd fdd combatants returned suggesting that the direct impact and the spillovers of the program vanished in the long run

does inducing informal firms to formalize make sense experimental evidence from benin abstract efforts to bring informal firms into the formal sector are often based on a view that this will bring benefits to the firms themselves or at least benefit governments through increasing the tax base a randomized experiment based around the introduction of the entreprenant legal status in benin is used to test these assumptions along with supplementary efforts to enhance the presumed benefits of formalizing to firms few firms register when just given information about the new regime but our full package of supplementary efforts boosts formalization by 16 3 percentage points however this formalization does not bring firms higher sales or profits and the cost of formalizing these firms exceeds the added taxation they will pay over the next decade we show how better targeting of these policies towards firms that look more like formal firms to begin with can increase the formalization rate and improve cost effectiveness

investigating the significance of the data collection period of household consumption and expenditures surveys for food and nutrition policymaking analysis of the 2010 bangladesh household income and expenditure survey abstract efforts to improve the use of household income and expenditure surveys hies for nutrition policy decisions face numerous methodological issues our objective was to explore how nutrition indicators vary by data collection period number of days of household consumption data available using the 2010 bangladesh hies household availability and individual apparent consumption of nutrients foods and food groups were estimated for each of 7 consecutive 2 day recall periods both separately and in combinations representing 2 4 6 8 10 12 or 14 days of data differences among cumulative data collection periods in mean apparent nutrient consumption and proportion with low values were statistically significant but small

remedying education evidence from two randomized experiments in india this paper presents the results of a two year randomized evaluation of a large scale remedial education program conducted in mumbai and vadodara india the remedial education program hires young women from the community to teach basic literacy and numeracy skills to children who reach standard three or four without having mastered these competencies the program implemented by a ngo in collaboration with the government is extremely cheap it cost 5 dollars per child per year and is easily replicable it has been implemented in 20 indian cities and reached tens of thousands of children we find the program to be very effective on average it increased learning by 0 15 standard deviations in the first year and 0 25 in the second year the gains are the largest for children at the bottom of the distribution children in the bottom third gain 0 2 standard deviations in the first year and 0 32 in the second year in math they gain 0 51 standard deviation in the second year the results are similar in the two grade levels and in the two cities at the margin extending this program would be up to 12 16 times more cost effective than hiring new teachers authors

coming out of the shadows estimating the impact of bureaucracy simplification and tax cut on formality in brazilian microenterprises abstract this paper evaluates the impact of a program of bureaucracy simplification and tax reduction on formality among brazilian microenterprises the simples program we document an increase of 13 percentage points in formal licensing among retail firms created after the program when compared to firms in ineligible sectors the impact on retailers is robust to a series of tests we find no impact on construction transportation services and manufacturing sectors

buy as you need nutrition and food storage imperfections abstract in this paper we investigate whether and how a more steady supply of foodgrain in local markets impacts the nutritional status measured with body mass indexes of both children and adults in a context characterized by large seasonal fluctuations in the price and availability of foodgrain taking advantage of the random scaling up of a program of food security granaries in burkina faso we reach three conclusions first especially in remote areas where local markets are thin the program considerably dampens nutritional stress the effect is strongest among children and young children in particular for whom deficient nutrition has devastating long term consequences second we argue that it is a change in the timing of food purchases translated into a change in the timing of consumption that drives the nutritional improvement a simple two period model shows that once we account for various forms of storage costs an increase in nutrition does not necessarily require larger quantity of food purchases or even consumption our last and unexpected conclusion is that the losses associated with foodgrain storage do not stem from physical losses in household granaries but rather from inefficient seasonal bodymass fluctuations one plausible mechanism behind this particular storage imperfection rests on the households urge to consume readily available foodgrain

microenterprise growth and the flypaper effect evidence from a randomized experiment in ghana standard models of investment predict that credit constrained firms should grow rapidly when given additional capital and that how this capital is provided should not affect decisions to invest in the business or consume the capital we randomly gave cash and in kind grants to male and female owned microenterprises in urban ghana for women running subsistence enterprises we find no gain in profits from either treatment for women with larger businesses we strongly reject equality of the cash and in kind grants only in kind grants cause growth in profits suggesting a flypaper effect whereby capital coming directly into the business sticks there but cash does not the results for men also suggest a lower impact of cash but differences between cash and in kind grants are less robust there is suggestive evidence that the difference in the effects of cash and in kind grants is associated more with lack of self control than with external pressure

what do we know about the impact of microfinance the problems of statistical power and precision abstract we review all eight randomized control trial studies of microfinance published in peer reviewed journals the studies generally show no or minimal impact from providing microloans to clients and have led many researchers and policy makers to conclude that microfinance has been proven to have little or no positive impacts on people s lives we review these studies in detail and find four main results first we are able to replicate the results using the researcher s original data second we observe that while the results are generally insignificant at traditional levels most estimated coefficients are large third every one of the studies is underpowered to detect reasonable effect sizes often due to low take up of the financial product offered pooling the data from the studies together improves power for most outcomes but minimum detectable effect sizes are still large finally when we run analysis on a pooled sample we find a treatment effect on business profits business revenue and household assets significant at the 1 level we argue that existing research on the impact of microfinance is generally underpowered to identify impacts reliably and suggests that we still know very little about the impact of microfinance we end by discussing ways to improve future research

the price effects of cash versus in kind transfers this article examines the effect of cash versus in kind transfers on local prices both types of transfers increase the demand for normal goods in kind transfers also increase supply in recipient communities which could lead to lower prices than under cash transfers we test and confirm this prediction using a programme in mexico that randomly assigned villages to receive boxes of food trucked into the village equivalently valued cash transfers or no transfers we find that prices are significantly lower under in kind transfers compared to cash transfers relative to the control group in kind transfers cause a 4 fall in prices while cash transfers cause a positive but negligible increase in prices in the more economically developed villages in the sample households purchasing power is only modestly affected by these price effects in the less developed villages the price effects are much larger in magnitude which we show is due to these villages being less tied to the outside economy and having less competition among local suppliers

informal groups and health insurance take up evidence from a field experiment summary this paper presents the results of 20 randomized experiments aimed at understanding the low take up of in patient health insurance observed in developing countries take up does not increase when participants receive information about the product or an assistance to register or small subsidies of 2 10 or 30 take up does not increase when the same information is provided by local respected community leaders when participants are offered an in kind gift a chicken if they register when participants are offered the possibility to contribute lower and more frequent payments or the possibility to pay by cellphone a full subsidy generates a mere 45 take up with no retention after one year in contrast to these low take up rates presenting the same information without any subsidies to existing informal groups raises take up to 12 still 7 after one year as well as trust and knowledge of the product social networks play a major role in the adoption of health insurance this paper provides a cost effective way to increase take up of health insurance while subsidies are found to be largely ineffective at raising take up in the long run

expanding credit access using randomized supply decisions to estimate the impacts expanding access to commercial credit is a key ingredient of financial development strategies there is less consensus on whether expanding access to consumer credit helps borrowers particularly when loans are extended at high interest rates popular skepticism about unproductive usurious lending is fueled by research highlighting behavioral biases that may induce overborrowing we estimate the impacts of expanding access to consumer credit at a 200 annual percentage rate apr using a field experiment and follow up data collection the randomly assigned marginal loans produced significant net benefits for borrowers across a wide range of outcomes there is also some evidence that the loans were profitable the author 2009 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oxfordjournals org oxford university press

informality and development in developing countries informal firms account for up to half of economic activity they provide livelihood for billions of people yet their role in economic development remains controversial some like hernando de soto 1989 2000 see informal firms as an untapped reservoir of entrepreneurial energy held back by government regulations in this view unleashing this energy by reducing entry regulations or improving property rights would fuel growth and development others like levy 2008 take a more cynical view stressing the advantages enjoyed by informal firms and workers from avoiding taxes and regulations a report from the mckinsey global institute describes informal firms as parasites competing unfairly with law abiding formal firms farrell 2004 in this view informality should be suppressed not unleashed still others follow the development tradition of lewis 1954 harris and todaro 1970 and more recently rauch 1991 and see informality as a byproduct of poverty from this dual perspective formal and informal firms are fundamentally different productive formal entrepreneurs pay taxes and bear the cost of government regulation to reach new customers raise capital and access public goods these entrepreneurs are often educated and find it more profitable to run bigger formal firms rather than the smaller informal ones in contrast informal entrepreneurs are typically uneducated and unproductive and they run small businesses producing low quality products for low income customers using little capital and

pay for locally monitored performance a welfare analysis for teacher attendance in ugandan primary schools public sector organizations often rely on reports by local monitors that are costly to verify and that serve twin objectives to incentivize agent performance and to provide information for planning purposes received wisdom has it that pay for locally monitored performance p4lmp will result in collusion and undermine both objectives but simple coasian logic suggests the reverse p4lmp puts transferable money on the table and may enable interested parties to bargain to a more efficient outcome this paper develops a theoretical model that shows why and for which parameters the welfare enhancing coasian scenario exists focusing on education we model how the preferences of a teacher agent and headteacher local monitor affect actual and reported teacher attendance and how these equilibrium outcomes depend on the financial stakes attached to reports to capture the value of information we also consider the welfare of a bureaucracy that makes a costly policy mistake when holding the wrong belief about teacher performance we test the model and estimate the predicted effects using data from a field experiment in ugandan primary schools randomly varying whether head teachers reports of teacher attendance are tied to bonus payments or not consistent with coasian logic p4lmp increased actual and reported teacher attendance by 9 and 15 percentage points respectively and reduced policy mistakes by 7 percentage points relative to unincentivized local monitoring we use these experimental impacts to undertake a detailed cost benefit analysis and conclude even under conservative assumptions that welfare improved when paying for locally monitored performance

fx trading and exchange rate dynamics i examine the sources of exchange rate dynamics by focusing on the information structure of fx trading this structure permits the existence of an equilibrium distribution of transaction prices at a point in time i develop and estimate a model of the price distribution using data from the deutsche mark dollar market that prroduces two striking results 1 much of the short term volatility in exchange rates comes from sampling the heterogeneous trading decisions of dealers in a distribution that under normal market conditions changes comparatively slowly 2 public news is rarely the predominant source of exchange rate movements over any horizon copyright the american finance association 2002

a note on cost structure and economies of scale in greek banking abstract this note studies the greek banking industry in 1980 1989 in order to estimate a representative cost structure functional form and search for economies of scale the constructed model uses a translogarithmic cost function that includes the size of assets capital labor and technological progress by using this model which has been used by benston et al 1982 hunter and timme 1986 and others we have been able to estimate for the first time an econometric form of the costs in greek banking and we have been able to investigate economies of scale in the greek banking industry although operating cost scale economies do exist total cost scale economies were not present this has been shown through the utilization of a large sample of pooled data of all greek banks for a period of ten years and the use of two other samples of large and small banks moreover by exploiting the properties of the model we shall be able to show whether technological progress has been a factor which lowers bank costs

long run effects of youth training programs experimental evidence from argentina we study the effect of a job training program for low income youth in cordoba argentina the program included life skills and vocational training as well as internships with private sector employers participants were allocated by means of a public lottery we rely on administrative data on formal employment employment spells and earnings to establish the effects of the program in the short term 18 months but also exceptionally for programs of this type in latin america and in developing countries in general in the medium term 33 months and in the long term 48 months the results indicate sizable gains of about 8 percentage points in formal employment in the short term about 32 higher than the control group although these effects dissipate in the medium and in the long term contrary to previous results for similar programs in the region the effects are substantially larger for men although they also seem to fade in the long run program participants also exhibit earnings about 40 higher than those in the control group and an analysis of bounds indicates that these gains result from both higher employment levels and higher wages the detailed administrative records also allow us to shed some light on the possible mechanisms underlying these effects a dynamic analysis of employment transitions indicates that the program operated through an increase in the persistence of employment rather than from more frequent entries into employment the earnings effect and the higher persistence of employment suggest that the program was successful in increasing the human capital of participants although the transient nature of these results may also reflect better matches from a program induced increase in informal contacts or formal intermediation jel j08 j24 j68 o15

the multibank holding company effect on cost efficiency in banking abstract this paper tests the hypothesis that differences in the organizational form embodied in independent banks one bank holding companies and multibank holding companies result in differences in operating cost efficiency the transaction and agency cost paradigms for analysis of organizational efficiency provide theoretical motivation for the hypothesis the effects of organizational form on bank operating expenses for individual banks are evaluated on subsamples divided into quartiles based on total revenue results indicate that for banks having revenues in the lowest quartile both one bank and multibank holding company affiliates are cost efficient relative to independent banks multibank holding company affiliates are cost efficient relative to both one bank affiliates and independent banks for banks in the interquartile range no significant differences in cost efficiency are noted banks in the highest revenue quartile relative efficiency at the organizational level is also evaluated results provide evidence of lower operating costs for banking operations of both multibank and one bank holding company organizations relative to independent banks taken as a whole the results imply that holding company affiliation conveys cost advantages to banking units below the 75th revenue percentile

politics and exchange rate forecasts abstract standard exchange rate models perform poorly in out of sample forecasting when compared to the random walk model we posit part of the poor performance of these models may be due to omission of political factors we test this hypothesis by including political variables that capture party specific election specific and candidate specific characteristics surprisingly we find our political model outperforms the random walk in out of sample forecasting at 1 12 month horizons for the pound dollar mark dollar pound mark and the trade weighted dollar mark and pound exchange rates

what are the headwaters of formal savings experimental evidence from sri lanka the world s poor are seeing a rapid expansion in access to formal savings accounts what is the source of savings when households are connected to a formal account we combine a high frequency panel survey spanning two and a half years with an experiment in which a sri lankan bank used mobile point of service pos terminals to collect deposits directly from households each week we find that the headwaters of formal savings lie in sacrificed leisure time households work more and improved savings options generate an increase in labour effort in both self employment and in the wage market the results suggest that the labour allocation channel is an important mechanism linking savings opportunities to income

does formality improve micro firm performance evidence from the brazilian simples program abstract this paper exploits an extensive brazilian micro enterprise survey and the 1996 introduction of a business tax reduction and simplification scheme simples to examine three questions first do high tax rates and complex tax regulations really constitute a barrier to the formalization of micro firms second does formalization improve firm performance measured along several dimensions including revenues employment and capital stock third what are the channels through which this occurs we find that simples led to a significant increase in formality in several dimensions moreover newly created firms that opt for operating formally show higher levels of revenue and profits employ more workers and are more capital intensive only for those firms that have employees the channel through which this occurs is not access to credit or contracts with larger firms rather it appears that the lower cost of contracting labor leads to adopting production techniques that involve a permanent location and a larger paid labor force

economies of superscale in commercial banking most previous studies of scale economies in banking have excluded banks larger than 1 billion in assets thus study by contrast estimates cost functions for the 100 largest us commercial banks hedonic terms are incorporated to correct for the aggregated nature of the call report data available for these banks in addition we attempt to quantify the cost benefit of diversification in the model we estimate efficient bank scale to range from 15 billion to 37 billion in total assets a thousandfold increase over some previous findings these results are supported by comparison of actual average costs as well as by casual historical observation and the level of widespread concern over interstate banking our findings suggest some cost incentive or benefit to expansion or consolidation among large regional banks including interstate expansion or consolidation

biofortification crop adoption and health information impact pathways in mozambique and uganda biofortification breeding staple food crops to be dense sources of essential micronutrients is fast emerging as a strategy to fight micronutrient malnutrition large scale biofortification investments are being made in several developing countries but until recently little rigorous evidence about the impact of these investments has been available in this paper we report findings from randomized impact evaluations conducted in both mozambique and uganda to study the impact of large scale pilot projects conducted between 2006 and 2009 to introduce provitamin a rich orange fleshed sweet potato ofsp as a strategy to reduce vitamin a deficiency in both countries projects randomly assigned interventions of di erent cost and intensity to distribute ofsp vines train households to grow ofsp and disseminate the health benefits of vitamin a we compare the impact of the interventions within and across the two countries on ofsp adoption knowledge about vitamin a and dietary intake of vitamin a by children and use causal mediation analysis imai et al 2011 to examine the impact pathways on vitamin a consumption after two years of intervention in both countries the project led to ofsp adoption rates of 61 68 percent among project households improved household knowledge about vitamin a and nearly doubled average dietary intake of vitamin a with no di erence between the more and less intense intervention models evidence suggests that vine access played the most important role in explaining the impact on vitamin a consumption in both countries consequently future programs can be designed to have similar impacts at even lower costs

informality and credit constraints evidence from sub saharan african mses abstractthe attributes of micro and small enterprises mses influencing access to credit in particular the level and role of firm informality are analysed in the article the puzzle is the push for mses to join the formal sector and the tug to avoid the extra burden it places on the firm it is important to know more clearly what forces are at work and the sources of the causal effects this study uses data from the world bank enterprise surveys for five low income countries lics in sub saharan africa the method is empirical and as we find informality to be endogenous to credit constraints an instrumental variable approach is estimated further to address the possibility of reverse causality an instrument for the informality variable is required not registered with inland revenue tax office is the chosen instrument variable the findings reveal that as the probability of a firm operating in the formal sector increases there is greater access to external credit the causality relationships are

does entry regulation hinder job creation evidence from the french retail industry are product market and entry regulation key sources of low employment growth in many european countries we investigate this question in the context of the french retail trade industry since 1974 approval by regional zoning boards has been required for the creation or extension of any large retain store in france we exploit a unique database that provides time and region specific variation in boards approval decisions we show that stronger deterrence of entry by the boards increased retailer concentration and slowed down employment growth in france

business practices in small firms in developing countries management has a large effect on the productivity of medium and large firms but does management matter in micro and small firms where the majority of the labor force in developing countries works we develop 26 questions that measure business practices in marketing stock keeping record keeping and financial planning these questions have been administered in surveys in bangladesh chile ghana kenya mexico nigeria and sri lanka we show that variation in business practices explains as much of the variation in outcomes sales profits and labor productivity and total factor productivity in microenterprises as in larger enterprises panel data from three countries indicate that better business practices predict higher survival rates and faster sales growth the association of business practices with firm outcomes is robust to including numerous measures of the owner s human capital we find that owners with higher human capital children of entrepreneurs and firms with employees employ better business practices data as supplemental material are available at http dx doi org 10 1287 mnsc 2016 2492 this paper was accepted by toby stuart entrepreneurship and innovation

modelling the informal sector formally abstract the theoretical characterization of formal informal sector dualism by labor market dualism is integrated with its empirical characterization by size dualism by supposing that the minimum formal sector wage is only enforced for firms greater than a certain size a firm s size varies directly with the talent of its enterpreneur manager and the choice between formal and informal sector entrepreneurship is determined endogenously it is then shown that the size gap between the smallest formal sector firm and largest informal sector firm varies directly with the formal informal sector wage differential which in turn is shown as expected to increase the further is the minimum wage above the market clearing wage the comparative statics of changes in the size of the firm above which the minimum wage is enforced are also examined

do gender and business trainings affect business outcomes experimental evidence from vietnam we use a randomized control trial to evaluate the impact of a business training for female clients of a microfinance institution in northern vietnam and we consider the impact on i business knowledge ii practices and ii outcomes as well as iv firm entry and exit decisions in addition we vary the nature of the intervention by inviting husbands to participate in the trainings for a subsample of our respondents to gauge both short term and medium term effects we combine data from two separate postintervention surveys we find evidence of economically substantive impacts on knowledge practices and outcomes and on the extensive margin entry and exit we also document that it takes time for the downstream outcomes of the trainings to materialize although we find evidence of medium term effects no such evidence exists for the short term inviting husbands to participate in the trainings does not affect any of our knowledge or practice measures but we document weak evidence for different

a reexamination of economies of scale in banking using a generalized functional form note using a sample of 1 205 unit banks for the years 1972 77 clark 1984 addresses a number of critical issues in ascertaining the nature of the cost function underlying the banking industry the generalized functional form methodology used by clark is ideal for empirically analyzing these questions this paper addresses three issues evolving from clark s study first a number of econometric problems that were not addressed by clark can arise in the application of the functional form method since the findings of clark have major implications for the question of scale economies in banking it is important to verify that these findings are not an econometric artifact second and more importantly the major modifications that have occurred in the structure of the banking industry during the past few years suggest that the corresponding operating parameters may have changed substantially from those in clark s 1972 77 sample finally previous literature has debated the relative scale economies of independent banks versus multi bank holding company mbhc affiliates the methodology of clark provides a unique opportunity to extend previous research on this issue

do wage subsidies provide a stepping stone to employment for recent college graduates evidence from a randomized experiment in jordan abstract this study examines the impact of a randomized experiment in jordan in which female community college graduates were assigned to receive a wage subsidy voucher the wage voucher led to a 38 percentage point increase in employment in the short run but the average effect is much smaller and no longer statistically significant after the voucher period has expired the extra job experience gained as a result of the wage subsidy does not provide a stepping stone to new jobs for these recent graduates which appears to be due to productivity levels not rising above a binding minimum wage

financial literacy and financial behaviour experimental evidence from rural rwanda we organise a field experiment with smallholder farmers in rwanda to measure the impact of financial literacy training on financial knowledge and behaviour the training increased financial literacy of participants changed their savings and borrowing behaviour and had a positive effect on the new business start up however it failed to have a significant short term impact on income using a two stage regression framework we identify enhanced financial literacy as one of the important factors explaining behavioural changes we also test whether financial knowledge spillovers from trained farmers to their peers in local village banks but find no evidence for that

beyond baseline and follow up the case for more t in experiments the vast majority of randomized experiments in economics rely on a single baseline and single follow up survey if multiple follow ups are conducted the reason is typically to examine the trajectory of impact effects so that in effect only one follow up round is being used to estimate each treatment effect of interest while such a design is suitable for study of highly autocorrelated and relatively precisely measured outcomes in the health and education domains this paper makes the case that it is unlikely to be optimal for measuring noisy and relatively less autocorrelated outcomes such as business profits household incomes and expenditures and episodic health outcomes taking multiple measurements of such outcomes at relatively short intervals allows the researcher to average out noise increasing power when the outcomes have low autocorrelation it can make sense to do no baseline at all moreover the author shows how for such outcomes more power can be achieved with multiple follow ups than allocating the same total sample size over a single follow up and baseline the analysis highlights the large gains in power from ancova rather than difference in differences when autocorrelations are low and a baseline is taken the paper discusses the issues involved in multiple measurements and makes recommendations for the design of experiments and related non experimental impact evaluations

experimental evidence on the economics of rural electrification we present results from an experiment that randomized the expansion of electric grid infrastructure in rural kenya electricity distribution is a canonical example of a natural monopoly experiment

returns to capital in microenterprises evidence from a field experiment small and informal firms account for a large share of employment in developing countries the rapid expansion of microfinance services is based on the belief that these firms have productive investment opportunities and can enjoy high returns to capital if given the opportunity however measuring the return to capital is complicated by unobserved factors such as entrepreneurial ability and demand shocks which are likely to be correlated with capital stock the authors use a randomized experiment to overcome this problem and to measure the return to capital for the average microenterprise in their sample regardless of whether they apply for credit they accomplish this by providing cash and equipment grants to small firms in sri lanka and measuring the increase in profits arising from this exogenous positive shock to capital stock after controlling for possible spillover effects the authors find the average real return to capital to be 5 7 percent a month substantially higher than the market interest rate they then examine the heterogeneity of treatment effects to explore whether missing credit markets or missing insurance markets are the most likely cause of the high returns returns are found to vary with entrepreneurial ability and with measures of other sources of cash within the household but not to vary with risk aversion or uncertainty

seeing is believing evidence from an extension network experiment extension is designed to enable lab to farm technology diffusion decentralized models assume that information flows from researchers to extension workers and from extension agents to contact farmers cfs cfs should then train other farmers in their communities such a modality may fail to address informational inefficiencies and accountability issues the authors run a field experiment to measure the impact of augmenting the cf model with a direct cf training on the diffusion of a new technology all villages have cfs and access the same extension network in treatment villages cfs additionally receive a three day central training on the new technology they track information transmission through two nodes of the extension network from extension agents to cfs and from cfs to other farmers directly training cfs leads to a large statistically significant increase in adoption among cfs however higher levels of cf adoption have limited impact on the behavior of other farmers

migrant remittances and information flows evidence from a field experiment do information flows matter for remittance behavior we design and implement a randomized control trial to quantitatively assess the role of communication between migrants and their international n

the impact of financial literacy training for migrants remittances are a major source of external financing for many developing countries but the cost of sending them remains high in many migration corridors despite efforts to lower these costs by offering new products and developing cost comparison information sources many new and promising inexpensive remittance methods have relatively low adoption rates the lack of financial literacy among migrants has been identified as one potentially important barrier to competition and new product adoption this paper presents the results of a randomized experiment designed to measure the impact of providing financial literacy training to migrants training appears to increase financial knowledge and information seeking behavior and reduces the risk of switching to costlier remittance products but it does not result in significant changes in the frequency of remitting or in the remitted amount

sell low and buy high arbitrage and local price effects in kenyan markets large and regular seasonal price fluctuations in local grain markets appear to offer african farmers substantial intertemporal arbitrage opportunities but these opportunities remain largely unexploited small scale farmers are commonly observed to sell low and buy high rather than the reverse in a field experiment in kenya we show that credit market imperfections limit farmers abilities to move grain intertemporally providing timely access to credit allows farmers to buy at lower prices and sell at higher prices increasing farm revenues and generating a return on investment of 29 to understand general equilibrium ge effects of these changes in behavior we vary the density of loan offers across locations we document significant effects of the credit intervention on seasonal price fluctuations in local grain markets and show that these ge effects shape individual level profitability estimates in contrast to existing experimental work the results indicate a setting in which microcredit can improve firm profitability and suggest that ge effects can substantially shape microcredit s effectiveness in particular failure to consider these ge effects could lead to underestimates of the social welfare benefits of microcredit interventions

central bank independence revisited the case for central bank independence cbi while not a new one has been strengthened by a growing body of empirical evidence by recent developments in economic theory and by the temper of the times the case is a strong one 1 which is becoming part of the washington orthodoxy the purposes of this paper are both to make more precise the type of cbi that is likely to enhance economic performance and to point to some remaining open issues and anomalies i start with the two theoretical approaches to cbi

endogenous time horizon and behavioral poverty trap theory and evidence from mozambique abstract this paper provides a model where a long term planning horizon improves economic decisions but also increases the salience of anticipated future utility hence a gloomy future induces the agent to shorten her time horizon in order to reduce distress caused by the anticipation of poverty at the cost of worsening her realized future consumption resulting in a behavioral poverty trap where poverty and shortsightedness reinforce each other the paper also provides primary empirical evidence of the endogenous determination of time horizon and of the existence of a behavioral poverty trap using a randomized controlled trial in mozambique that provided agro input subsidies and a matched savings program i show that improvement in economic prospects resulted in a significant increase in the planning horizon of the poor beneficiaries moreover the increase in horizon significantly predicts asset accumulation of beneficiaries during the two years following the intervention

international comparison of bank production characteristics and technological change in this paper we conduct an international comparison of bank production and technological characteristics the comparison is performed using novel evidence on changes in labour demand over the period 1980 89 for banks headquartered in canada france west germany italy japan and the united states the results suggest that there is relatively low substitutability of labour for capital in the production process of these banking organizations significant scale economies were found with regards to the expansion of output and the concomitant increase in labour in addition technological change operated to lower the quantity of inputs needed to produce a given level of outputs and increased the minimum efficient size bank over the sample period many of the production characteristics and technology effects varied significantly across countries these findings imply that intercountry differences in production characteristics and technological change should be explicitly recognized in bank strategic planning

location search costs and youth unemployment experimental evidence from transport subsidies do high search costs affect the labour market outcomes of jobseekers living far away from jobs i randomly assign transport subsidies to unemployed youth in urban ethiopia treated respondents increase job search intensity and are more likely to find good permanent jobs subsidies also induce a short term reduction in temporary work i use a high frequency phone call survey to track the trajectory of search behaviour over time to show that the subsidies significantly increased job search intensity and the use of formal search methods the evidence suggests that cash constraints cause young people to give up looking for good jobs too early

wage subsidies for microenterprises wage subsidies have long been used by governments as part of their active labor market policies to generate employment for the disadvantaged or to sustain employment during downturns the current global financial crisis has seen such policies return to prominence with many developed nations using such policies to try and reduce lay offs nicholas kaldor 1936 p richard layard and stephen nickell 1980 and lawrence katz 1998 lay out the economic arguments for such a policy and discuss conditions under which a short term subsidy might have longer term effects on employment for the targeted individuals

war and local collective action in sierra leone a comment on the use of coefficient stability approaches abstract in a study of the effect of civil war exposure on local collective action outcomes in sierra leone bellows and miguel 2009 employ a coefficient stability approach to assess the importance of omitted variable bias building on altonji et al 2005a here we clarify the econometric assumptions underlying bellows and miguel 2009 and extend their analysis using data on dependent variable reliability ratios and the method developed in oster 2015

direct and indirect effects of malawi s public works program on food security labor intensive public works programs are important social protection tools in low income settings intended to supplement income of poor households and improve public infrastructure in this evaluation of the malawi social action fund an at scale government operated program across and within village randomization is used to estimate effects on food security and use of fertilizer there is no evidence that the program improves food security and some negative spillovers to untreated households these disappointing results hold even under modifications to the design of the program to offer work during the lean rather than harvest season or increase the frequency of payments

the impact of aids related news on exchange rates in south africa abstract this article focuses on the economic impact of aids related news on exchange rates in south africa south africa s hiv aids infection rates are so high that aids is now a macroeconomic problem not just a public health problem news about the spread of the disease can therefore have significant effects on financial markets we collect daily data on the number of news stories about aids that appear in the cape times from 1998 to 2002 and examine the impact of these news stories on fluctuations in the south african rand u s dollar exchange rate we find that negative news stories about aids have a significant negative effect on the value of the rand but that positive news stories have little or no effect the findings of the article provide concrete evidence of a channel through which the aids pandemic continues to adversely affect macroeconomic conditions in sub saharan african countries

heterogeneous impact dynamics of a rural business development program in nicaragua abstract we study the impacts of a rural development program designed to boost the income of the small farm sector in nicaragua exploiting the random assignment of treatment we find statistically and economically significant impacts on gross farm income and investment in productive farm capital using continuous treatment estimation techniques we examine the evolution of program impacts over time and find that the estimated income increase persists and that the impacts on productive capital stock continue to rise even after the program concluded additionally panel quantile methods reveal striking heterogeneity of program impacts on both income and investment we show that this heterogeneity is not random and that there appear to exist low performing household types who benefit little from the program whereas high performing upper quantile households benefit more substantially analysis using generalized random forests a machine learning algorithm points toward greater program impacts for households who were disadvantaged at baseline even after controlling for this source of heterogeneity we find large and persistent differences in how much different types of households benefited from the program while the benefit cost ratio of the program is on average positive the impact heterogeneity suggests that business development programs aiming to engage farm households as agricultural entrepreneurs have limitations as instruments to eliminate rural poverty

if it needs a power calculation does it matter for poverty reduction abstract a key critique of the use of randomized experiments in development economics is that they largely have been used for micro level interventions that have far less impact on poverty than sustained growth and structural transformation i make a distinction between two types of policy interventions and the most appropriate research strategy for each the first are transformative policies like stabilizing monetary policy or moving people from poor to rich countries which are difficult to do but where the gains are massive here case studies theoretical introspection and before after comparisons will yield good enough results in contrast there are many policy issues where the choice is far from obvious and where even after having experienced the policy countries or individuals may not know if it has worked i argue that this second type of policy decision is abundant and randomized experiments help us to learn from large samples what cannot be simply learnt by doing

the impact of vocational training for the unemployed experimental evidence from turkey this brief summarizes the updates from the 2014 paper entitled the impact of vocational training for the unemployed experimental evidence from turkey conducted between between 2010 and 2011 in turkey a randomized experiment is used to evaluate a large scale active labor market policy turkey s vocational training programs for the unemployed a detailed follow up survey of a large sample with low attrition enables precise estimation of treatment impacts and their heterogeneity the average impact of training on employment is positive but close to zero and statistically insignificant which is much lower than either program officials or applicants expected over the first year after training the paper finds that training had statistically significant effects on the quality of employment and that the positive impacts are stronger when training is offered by private providers however longer term administrative data show that after three years these effects have also dissipated

team incentives and performance evidence from a retail chain in a field experiment with a retail chain 1 300 employees 193 shops randomly selected sales teams received a bonus the bonus increases both sales and number of customers dealt with by 3 percent each dollar spent on the bonus generates 3 80 in sales and 2 10 in profit wages increase by 2 2 percent while inequality rises only moderately the analysis suggests effort complementarities to be important and the effectiveness of peer pressure in overcoming free riding to be limited after rolling out the bonus treatment and control shops performance converge suggesting long term stability of the treatment effect

who you train matters identifying complementary effects of financial education on migrant households there has long been a concern among policymakers that too much of remittances are consumed and too little saved limiting the development impact of migration financial literacy programs have become an increasingly popular way to try and address this issue but to date there is no evidence that they are effective in inducing savings among remittance receiving households nor is it clear whether such programs are best targeted at the migrant the remittance receiver or both the authors conducted a randomized experiment in indonesia which allocated migrants and their families to a control group a migrant only training group a family member only training group and a training group in which both the migrant and a family member were trained three rounds of follow up surveys are then used to measure impacts on the financial knowledge behaviors and remittance and savings outcomes of the remaining household they find that training both the migrant and the family member together has large and significant impacts on knowledge behaviors and savings training the family member alone has some positive but smaller effects whilst training only the migrant leads to no impacts on the remaining family members the results show that financial education can have large effects when provided at a teachable moment but that this impact varies greatly with who receives training

the development impact of a best practice seasonal worker policy seasonal migration programs are widely used around the world yet there is little evidence as to their development impacts a multiyear prospective evaluation of new zealand s recognised seasonal employer rse seasonal worker program allows us to measure the impact of participating in this program on households in tonga and vanuatu using a propensity score prescreened difference in differences analysis based on surveys fielded before during and after participation we find that the rse has indeed had positive development impacts that dwarf those of other popular development interventions it has increased income consumption and savings of households durable goods ownership and subjective standard of living the results also suggest that child schooling improved in tonga

entry regulation and business start ups evidence from mexico the authors estimate the effect on business start ups of a program that significantly speeds up firm registration procedures the program was implemented in mexico in different municipalities at different dates authors estimates suggest that new start ups increased by about 4 percent in eligible industries and the authors present evidence that this is a causal effect most of the effect is temporary concentrated in the first 10 months after implementation the effect is robust to several specifications of the benchmark control group time trends the authors find that the program was more effective in municipalities with less corruption and cheaper additional procedures

incentives information and malnutrition evidence from an experiment in india abstract this study provides one of the first pieces of evidence comparing the effectiveness of different performance pay contracts among caregivers to improve child health we carry out a cluster randomized controlled trial in urban slums of kolkata india covering 209 childcare centers to test three separate performance pay treatments in addition to providing information on the demand side we promise low or high absolute performance incentives to public sector caregivers where each bonus is based on improvements in health of 3 6 year old children under their care we also test for the impact of relative incentives where the bonus depends upon a worker s performance relative to her peers all mothers in the treatment arms are also provided nutritional information high absolute incentives to workers combined with nutritional information to mothers works to reduce severe malnutrition by 5 percentage points over three months relative incentives and low absolute incentives show no significant improvements in child health on average