A structural evaluation of a large-scale quasi-experimental microfinance initiative
By: [by] Joseph P. Kaboski [and] Robert M. Townsend
Contributors: Townsend, Robert M., 1948-; Massachusetts Institute of Technology. Dept. of Economics
Series: Working paper series / Massachusetts Institute of Technology, Dept. of Economics -- working paper 09-12; Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 09-12.
Publisher: Massachusetts Institute of Technology, Dept. of Economics
Published: 2008
Place of publication: Cambridge, MA
Language: eng
Number of pages: 51
Description: This paper uses a structural model to understand, predict, and evaluate the impact of an exogenous micro credit intervention program, the Thai Million Baht Village Fund program. We model household decisions in the face of borrowing constraints, income uncertainty, and high-yield indivisible investment opportunities. After estimation of parameters using pre-program data, we evaluate the model's ability to predict and interpret the impact of the village fund intervention. Simulated predictions from the model mirror actual data in reproducing a greater increase in consumption than credit, which is interpreted as evidence of credit constraints. A cost-benefit analysis using the model indicates that some households value the program much more than its per household cost, but overall the program costs 20 percent more than the sum of these benefits. Keywords: microfinance, buffer stock, credit constraint. JEL Classifications: O1, E2 Working Paper Series.
Notes: "December 1, 2008."

Includes bibliographical references (p. 47-51).

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