Published on Development Impact

Weekly links September 24: problems with excessive aspirations, gorillas in the midst of data, VR for green WTP, and more….

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·       On VoxDev, Aakash Mohpal, Dean Yang and I look at the potential downsides of raising aspirations for poor entrepreneurs. We worked with a microfinance organization, who tested two different approaches to encouraging their clients to save – a standard financial literacy/knowledge-based course, and one that focused on raising financial aspirations. The aspirations treatment led to large increases in savings goals, but the entrepreneurs fell far short of achieving these goals, and instead reduced borrowing and investment in their firms.

·       “A lot of these small businesses don’t really want to be businesses, what they want is jobs”. In a VoxDev podcast, Supreet Kaur discusses her recent work with co-authors Emily Breza and Yogita Shamdasani on labor rationing in rural lean seasons.

·       Johannes Haushofer is nicely putting up his intermediate development economics lectures on Youtube. As well as being of interest to students wanting to learn the subject, it is also a nice example of how hybrid/zoom can be used to extend the traditional classroom lecture format. As well as students in class in Stockholm, he has students from developing countries attending remotely, bringing an immediate reality check to class discussions, and is also bringing in virtually some authors of the papers for Q&As etc.

·       Using VR in discrete choice experiments: Michael Cameron summarizes a recent paper that uses VR to help in eliciting willingness to pay for “green infrastructure” like trees alongside streets – using VR to help participants see the environment and interact with it reduced participants uncertainty about their valuations compared to just giving them a text description or showing them a fly-by video.

·       A summary of existing evidence on the impact of the COVID-19 pandemic on academic productivity.  

·        A hypothesis is a liability” to exploratory science argues Itai Yanai and Martin Lercher in an article in Genome Biology. They made up a dataset and gave it to 33 students to analyze. They told the students that it was data on the BMI of 1786 people, and the number of steps each took each day. Students in one group were then told to consider three specific hypotheses (e.g. than men take more steps than women each day), while students in the other group were just asked what they conclude from the dataset. “The most notable “discovery” in the dataset was that if you simply plotted the number of steps versus the BMI, you would see an image of a gorilla waving at you… While we teach our students the benefits of visualization, answering the specific hypothesis-driven questions did not require plotting the data. We found that very often, the students driven by specific hypotheses skipped this simple step towards a broader exploration of the data. In fact, overall, students without a specific hypothesis were almost five times more likely to discover the gorilla when analyzing this dataset” Caution sample is small and unclear whether students were randomized into the groups or not, but a fun reminder to always plot your data  h/t Josh You.

·       If you are looking for a new long-interview format podcast, former Planet Money host Cardiff Garcia has a new podcast called The New Bazaar. In the first episode, Cardiff interviews Peter Blair Henry about structural reforms, growth, and development, including suggestions from Peter of the importance of data in what the World Bank should be doing to increase infrastructure investment (h/t Jeff Mosenkis).


David McKenzie

Lead Economist, Development Research Group, World Bank

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