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Aspirations and Well-being in Rural Ethiopia
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Aspirations and Well-being in Rural Ethiopia

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International Food Policy Research Institute (IFPRI) and Ethiopian Development Research Institute (EDRI). Conference on "Towards what works in Rural Development in Ethiopia: Evidence on the Impact of …

International Food Policy Research Institute (IFPRI) and Ethiopian Development Research Institute (EDRI). Conference on "Towards what works in Rural Development in Ethiopia: Evidence on the Impact of Investments and Policies". December 13, 2013. Hilton Hotel, Addis Ababa.

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  • Ethiopian households’ average expenditure pattern – stimulants vs. human capital - 2-4 times (HICE of 1995/96, 1999/2000, and 2004/05);FatalismGeneral - lack of proactive and systematic effort to better one’s own life (consistent with the language of the poor);Economic perspective - making the ‘investments to better one's life’.

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  • 1. ETHIOPIAN DEVELOPMENT RESEARCH INSTITUTE Aspirations and Well-being in Rural Ethiopia Tanguy Bernard1, Stefan Dercon2, Kate Orkin3, and Alemayehu Seyoum Taffesse1 1International Food Policy Research Institute, 2 University of Oxford, 3 University of Cambridge Towards what works in rural development in Ethiopia: Evidence on the impact of investments and policies December 13th, 2013 Hilton Hotel, Addis Ababa 1
  • 2. Outline     Motivation Elements of the aspirations framework Aspirations project Field experiment – design and findings 16/12/2013 2
  • 3. Motivation – why aspirations  Conceptual – ‘opportunities’  Empirical – Why do the poor not ‘invest’?  Ethiopians and fatalism?  Focus 1 - ‘external circumstances’ and ‘opportunities’.  Low returns to investments;  Unexploited opportunities due to lack of information or knowledge;  Social constraints;  Focus 2 - constraints associated with the manifested attributes of decision makers  Identity issues: sense of self;  Psychological issues: impatience, commitment, and psychological barriers Aspirations failure perspective 16/12/2013 3
  • 4. Elements of the Aspirations Perspective  Aspirations:  A desire or an ambition to achieve something  An aim and implied effort to reach it  A set of future-regarding preferences  Related concepts  Economics : Satisficing  Psychology : Self-efficacy, locus of control  Anthropology : Aspiration failures  Common elements  Goals and aspirations are important determinants of success;  Evolution through time in response to circumstances;  Role of social comparisons and learning from relevant others, An individual-level yet culturally (collectively) determined attribute  towards exploration of individual-group symbiosis 16/12/2013 4
  • 5. Elements of the Aspirations Perspective What are Aspirations?  Aspirations have two distinctive aspects: • • Future-oriented - are goals that can only be satisfied at some future time (differ from immediate gratifications); Motivators - are goals individuals are willing, in principle, to invest time, effort or money in to attain (different from idle daydreams and wishes) Note: the ‘willingness to invest’ is ‘potential’, or ‘conditional’  Aspirations and expectations – preference vs. beliefs; 16/12/2013 5
  • 6. Elements of the Aspirations Perspective Why are aspirations important/useful? Aspirations (or the capacity to aspire):  Reflect bounded rationality;  Are socially determined (social interaction);  Are distributed unevenly within communities.  Condition individual behaviour and well-being  Useful device in analysing and/or addressing poverty 16/12/2013 6
  • 7. Conceptual Schema 16/12/2013 7
  • 8. The “Aspirations” project Step 1 – correlates of aspiration-related concepts Step 2 – test and validate a measurement strategy Step 3 – assess validity of the “aspiration window” hypothesis  An experiment  Exogenous shock to aspirations: Mini-documentaries of local success stories screened to randomly selected individuals. Placebo: local TV show.  3 rounds of data • Baseline pre-treatment (Sept-Dec 2010) • Aspirations retest immediately after treatment • Follow-up (Mar-May 2011) 16/12/2013 8
  • 9. On going experiment 16/12/2013 9
  • 10. Observations    "Weak" treatment, but:  Documentaries affected aspirations, expectations, expenditure on children’s schooling, time allocation, savings behaviour, and hypothetical loan demand, perceptions more than the placebo even 6 months after treatment;  Direct and, even more visible, indirect (group) effects are detected – more of an aspiration window story rather than a role model one;  It is not obvious why some effects are direct (savings) while others are indirect (time allocation); Further analysis; Expanding coverage – Malawi, Pakistan via IFPRI; 16/12/2013 10
  • 11. 16/12/2013 11