C9 - Design of Experiments
We experimentally test the impact of expanding access to basic bank accounts in Uganda, Malawi, and Chile. Over two years, 17 percent, 10 percent, and 3 percent of treatment individuals made five or more deposits, respectively. Average monthly deposits for them were at the 79th, 91st, and 96th percentiles of baseline savings. Survey data show no clearly discernible intention–to–treat effects on savings or any downstream outcomes.
Agents often use noisy signals from their neighbors to update their beliefs about a state of the world. The effectiveness of social learning relies on the details of how agents aggregate information from others. There are two prominent models of information aggregation in networks: (1) Bayesian learning, where agents use Bayes’ rule to assess the state of the world and (2) DeGroot learning, where agents instead consider a weighted average of their neighbors’ previous period opinions or actions.
The welfare impact of expanding access to bank accounts depends on whether accounts crowd out pre-existing financial relationships, or whether private gains from accounts are shared within social networks. To study the effect of accounts on financial linkages, we provided free bank accounts to a random subset of 885 households. Within households, we randomized which spouse was offered an account and find no evidence of negative spillovers to spouses.
A large literature examines performance pay for managers in the private sector, but little is known about performance pay for managers in public sector bureaucracies. In this paper, we study performance incentives rewarding school administrators for reducing anemia among their students. Randomly assigning 170 schools to three performance incentive levels and two orthogonal sizes of unconditional grants, we analyze performance pay and its complementarity with discretionary resources.
The paper reports the result of an experimental game on asset integration and risk taking. We and some evidence that winnings in earlier rounds affect risk taking in subsequent rounds, but no evidence that real life wealth outside the experiment affects risk taking. Controlling for past winnings, participants receiving a low endowment in a round engage in more risk taking. We test a 'keeping-up-with-the-Joneses' hypothesis and and some evidence that subjects seek to keep up with winners, though not necessarily average earnings.
We use detailed observational data constructed from daily passenger-level logbooks and weekly surveys to study the intertemporal labor supply decisions of Kenyan bicycle taxi drivers, while generating variation in cash on hand through randomized cash payouts. We document three key facts: (1) drivers work more in response to both unexpected and expected cash needs; (2) drivers discontinuously increase the probability of quitting once they have reached their day’s cash need; but (3) randomized cash payouts have no effect on labor supply.
A large share of the poor in developing countries run small enterprises, often earning low incomes. This paper explores whether the poor performance of businesses can be explained by a lack of basic business skills. We randomized the offer of a free, 48-hour business skills course to female entrepreneurs in rural Mexico. We find that those assigned to treatment earn higher profits, have larger revenues, serve a greater number of clients, are more likely to use formal accounting techniques, and more likely to be registered with the government.