Published on Development Impact

Weekly links September 23: exporting vs schooling, poor businesses and the prices they charge, guaranteed incomes and a credit multiplier, and more…

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After yesterday’s bonus links, here are the regular links for the week – so lots of weekend reading for everyone

·       On Let’s Talk Development, Iva Trako and Dahyeon Jeong summarize five findings on the use of cash and in-kind transfers in humanitarian settings. “Only six studies in our review assess the relative effectiveness of cash versus in-kind transfers. We find that the effectiveness of different transfer modalities depends on the nature of the humanitarian crisis (for example, sudden onset vs. slow onset), the objective of the program or the main outcome of interest, the profile of the targeted population, implementation costs, and local market capacity, among others”

·       The Hidden Brain podcast has an episode on preventing violent crimes, with discussion with Sara Heller and Chris Blattman. Chris talks about his CBT work in Liberia, and provides a great example of how to use storytelling to bring to life the context behind a study.

·       The Ideas of India podcast has a series with Shruti Rajagopalan speaking with job market candidates about their research. In this episode with Nishant Vats, they talk about his JMP on how a program which gave the guarantee of unconditional recurring income to farmers in India spurred farmers to actually generate more income from work (not work less). The main mechanism is a credit demand channel – they are more willing to take on the risk of doing new capital-intensive investments when they have the protection of some guaranteed income. And for the PhD students, this nice aside: “I actually tried this experiment. I actually went to my banker and asked them, “Okay. See, I’m at Booth. I’m a grad student right now. My stipend is meager, but after a year what will happen is I’ll go into the market, and by the historical records I will at least earn $150,000 a year. Is it possible for you to basically give me a loan against my future income?” He laughed. He said, “No, it’s not possible.”

·       Progresa had less effect in Mexican regions with more export manufacturing jobs writes Teresa Molina and Joacquim Vidiella-Martin on VoxDev – the argument being that the opportunity costs of kids staying in school rise much more quickly in areas with good manufacturing jobs that don’t require a lot of schooling as an alternative.

·       On the IGL blog, Nathan Fiala provides a short summary of an RCT of a youth training program in Tanzania: “Our study consisted of 4,537 (mostly) rural youth in 135 villages. We found large impacts from the program, but only for women. After two years, women’s economic outcomes, including savings, engagement in the labor market, and quality of jobs, all improve substantially. We found no effects on economic outcomes for men”

·       In VoxDev, Morgan Hardy, Gisella Kagy and Lena Song summarize their recent AER Insights paper on how the financial need of small business owners affects the prices they charge to buyers among garment-making firms in Ghana.” Firms with lower per capita household liquidity settled for lower prices. A one standard deviation decrease in per capita household liquidity is associated with a 5% decrease in final price….One possible explanation for this strong relationship between financial need and pricing is that having less money makes an owner less comfortable with risk. In the pricing decision, owners face a trade-off: asking for a higher price for the same product pays off if the buyer agrees, but the owners also face a higher chance of the customer walking away (i.e. of not selling the product at all). This study suggests that having less money makes business owners feel less comfortable with risk, and therefore they will settle for lower prices to make a sale.”

·       Congratulations to the winners of awards at the 2022 meeting of APSA’s Experimental Research Section – including dissertation winners, best papers and books, and the World Bank’s Arianna Legovini who received the award for public service “for her tremendous work in promoting experimental research and rigorous impact evaluation and in transforming the evidence from that work into policy action”.

·       “What keeps coming up, and I think should really surprise and worry people, is the gap between engineering estimates of how promising a technology is for mitigation and how well it actually works in practice” – Esther Duflo in the New York Times on climate change, evidence, and inequality

·       As a bit of fun, Florian Ederer has a twitter thread comparing economics journals to tennis tournaments: e.g. “Quarterly Journal of Economics = Wimbledon - The oldest and most influential event, but also clubby, snobby, and elitist. To win it you must train on a very particular surface/ZIP code.”


David McKenzie

Lead Economist, Development Research Group, World Bank

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