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Learning with Others - A Randomized Field Experiment on the Formation of Aspirations in Rural Ethiopia
 

Learning with Others - A Randomized Field Experiment on the Formation of Aspirations in Rural Ethiopia

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International Food Policy Research Institute (IFPRI) and Ethiopian Development Research Institute (EDRI) in collaboration with Ethiopian Economics Association. Eleventh Conference on Ethiopian ...

International Food Policy Research Institute (IFPRI) and Ethiopian Development Research Institute (EDRI) in collaboration with Ethiopian Economics Association. Eleventh Conference on Ethiopian Economy, July 18-20, 2013

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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’.
  • For example, a person with a narrow aspiration gap with respect to wealth could be expected to have limited incentives to invest with the aim of increasing her wealth. Thus, low investment on the part of individuals provides an initial indicator of narrow aspiration gap.

Learning with Others - A Randomized Field Experiment on the Formation of Aspirations in Rural Ethiopia Learning with Others - A Randomized Field Experiment on the Formation of Aspirations in Rural Ethiopia Presentation Transcript

  • 23/07/2013 Learning with Others - A Randomized Field Experiment on the Formation of Aspirations in Rural Ethiopia Tanguy Bernard1, Stefan Dercon2, Kate Orkin2, and Alemayehu Seyoum Taffesse1 1International Food Policy Research Institute, 2 University of Oxford July 18, 2013 Eleventh International Conference on the Ethiopian Economy Ethiopian Economic Association 1
  •  Motivation  Elements of the aspirations framework  Aspirations project  Field experiment – design and findings Outline 23/07/2013 2
  •  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 Motivation – why aspirations 23/07/2013 3
  • 23/07/2013  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 Elements of the Aspirations Perspective 4
  • Elements of the Aspirations Perspective 23/07/2013 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; 5
  • 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 23/07/2013 6
  • Elements of the Aspirations Perspective How do aspirations condition individual behaviour?  Aspiration window:  an individual’s cognitive world, his/her zone of ‘similar’, ‘attainable’ individuals;  Reflects the information and economic opportunities of the local environment;  Multi-dimensional (‘similarity’);  Aspiration gap:  difference between the aspired ‘state’ and current ‘state’  Conditions future-oriented behaviour - inverted U relationship between gap and effort A possible outcome is an aspiration failure - lack of pro-active behaviour (or ‘under-investment’) towards filling the aspiration gap 23/07/2013 7
  • Conceptual Schema 23/07/2013 8
  • Elements of the Aspirations Perspective Measurement Issues • Aspirations are not directly observable – Revealed by observed behaviour: interpretation issues (linking aspirations and behaviour) – Elicited using subjective questions: measurement issues • Limits to subjective assessment: – Subjects: subjects’ willingness to report private knowledge, evaluation apprehension, and subject role playing – Instruments (attributes of): order of questions (anchoring), the number of categories on the rating scale (odd-even), the adjectives that are used as the endpoints of the rating scale, and the adverbs that describe scale categories. (e.g. Delavande et al. (2009), Bertrand and Mullainathan (2001) for reviews) 23/07/2013 9
  • Elements of the Aspirations Perspective Identification issues • individual characteristics affect aspirations, aspiration windows and behaviour (e.g. schooling levels, wealth, and family background), Particularly the endogeneity of the aspiration window a key hurdle • aspirations ‘cause’ success – a person with higher aspirations may be more successful. • Success ‘causes’ aspirations – a successful person may revise his/her aspiration to a higher level, or experiment, panel data 23/07/2013 10
  • 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) 23/07/2013 11
  • Field Experiment - Aspirations Measures 200,000 ETB ~ value of one harvest of chat from one hectare 100,000 ETB ~ value of one harvest of chat from half a hectare 0 ETB 23/07/2013 12
  • Surveyed : Treatment, 6 households (12 individuals) in every village Placebo, 6 households (12 individuals) in every village Control, 6 households (12 individuals) in every village Non-Surveyed : Treatment, 18 households (36 individuals)/ intense treatment village Placebo, 18 households (36 individuals)/ intense placebo village Treatment village Placebo village  16 Screening sites, 4 villages/screening site (2 Intense Treatment, 2 Intense Placebo),  36 households/village (18 households surveyed, 18 households not surveyed) Field Experiment – Design 23/07/2013 13
  • On going experiment 23/07/2013 14
  • Field Experiment – Basic Features 23/07/2013 15 All villages Intense- treatment villages Intense- placebo villages # villages 64 32 32 # individuals 1,942 1,011 931 of which: Treatment individuals 610 324 303 Control individuals 625 343 311 Placebo individuals 620 344 317 Avg # peers invited to treatment 0.83 1.23 0.39 (std.dev) (0.92) (0.96) (0.63) Avg # peers invited to placebo 0.77 0.38 1.20 (std.dev) (0.89) (0.61) (0.95)
  • Field Experiment – Baseline Correlates of Aspirations Income aspiration Wealth aspiration Education aspiration Social status aspiration Aspiration index Age -0.000 0.001 0.002 0.006 0.003 (0.000) (0.002) (0.003) (0.003)** (0.001)** Age² 0.000 -0.000 -0.000* -0.000* -0.000 (0.000) (0.000) (0.000) (0.000) (0.000)*** Gender (Male=1) 0.008 0.062 0.258 0.096 0.104 (0.002)*** (0.036)* (0.051)*** (0.049)** (0.021)*** Education (Read/write=1) -0.000 0.068 0.333 0.312 0.152 (0.002) (0.070) (0.051)*** (0.073)*** (0.027)*** R2 0.03 0.01 0.08 0.04 0.07 N 1,964 1,967 1,932 1,957 1,865 * p<0.1; ** p<0.05; *** p<0.01; Screening site fixed effects included but not reported; Robust standard errors in parentheses 23/07/2013 16
  • Balance Sample balanced on gender, literacy, age and most outcomes * p<0.1; ** p<0.05; *** p<0.01 All Treatment (T) Placebo (P) Control (C) % compliance by treatment status 95 93.8 96.2 100 Education (Read/write =1) Gender (% male) Age (complete d years) Baseline Standarized ---- Aspiration Income Wealth Children's Education Social Status Aggregate Difference: T-C, p-value 0.02 0.32 0 0.84 0.15 0.86 0.1 0.14 0.03 0.35 0.05 0.43 0.09 0.08* 0.04 0.12 Difference: P-C, p-value 0.02 0.32 0 0.93 0.05 0.94 0 0.89 0.05 0.15 0.01 0.83 0.04 0.55 0.01 0.5 23/07/2013 17
  • Field Experiment - Compliance and Potency of Treatment Treatment (standard error) Placebo (standard error) Difference (p-value) Liked a lot what I saw? 0.95 0.73 0.22 (0.02) (0.01) (0.00)*** Discussed it a lot with my neighbours 0.87 0.71 0.15 (0.01) (0.02) (0.00)*** Discussed it at least once with neighbours over the past two weeks 0.32 0.21 0.11 (0.02) (0.02) (0.00)*** Content generated a lot of discussion within community 0.92 0.72 0.20 (0.01) (0.02) (0.00)*** Assessment of Documentaries and Placebo * p<0.1; ** p<0.05; *** p<0.01 23/07/2013 18
  • Field Experiment - Compliance and Potency of Treatment How does his/her present condition fares compared to yours today? He/she is worse off We’re about the same He/she is better off How did his/her initial condition fared compared to yours five years ago? He/she was worse off 9.35 1.40 40.19 We were about the same 4.83 2.49 12.15 He/she was better off 6.70 1.71 21.18 Table 5 – Relevance of documentaries Cell proportions are reported. The totals of all cells add up to 100. N=642 23/07/2013 19
  • Impact on Aspirations - Estimation strategy 23/07/2013 20
  • Treatment and Placebo Effects on Aspirations (1) (2) (3) (4) Treatment 0.027 0.026 (0.018) (0.018) Placebo 0.016 0.015 (0.018) (0.018) # peers w/treatment 0.026 0.021 (0.010)*** (0.009)** # peers w/placebo 0.001 -0.022 (0.010) (0.012)* Baseline aspiration 0.132 0.157 0.132 0.157 (0.062)** (0.050)*** (0.062)** (0.050)*** Constant 0.053 0.038 0.095 0.018 (0.035) (0.036) (0.037)*** (0.037) R2 0.06 0.07 0.06 0.08 N 1,210 1,258 1,210 1,258 * p<0.1; ** p<0.05; *** p<0.01; Screening site fixed effects not reported; Robust standard errors in parenthesis 23/07/2013 21
  • Treatment and Placebo Effects on Expectations * p<0.1; ** p<0.05; *** p<0.01; Screening site fixed effects not reported; Robust standard errors in parenthesis (1) (2) (3) (4) Treatment 0.051 0.049 (0.023)** (0.023)* Placebo 0.021 0.018 (0.021) (0.021) # peers w/treatment 0.024 0.032 (0.010)** (0.010)*** # peers w/placebo 0.015 0.007 (0.011) (0.014) Baseline expectations 0.401 0.074 0.402 0.075 (0.056)*** (0.032)** (0.057)*** (0.032)** Constant -0.047 -0.070 -0.028 -0.093 (0.046) (0.048) (0.048) (0.047) R2 0.16 0.06 0.16 0.06 N 1,093 1,141 1,093 1,141 23/07/2013 22
  • Treatment and Placebo Effects on Future-Oriented Behaviour * p<0.1; ** p<0.05; *** p<0.01; Screening site fixed effects not reported; Robust standard errors in parenthesis (1) (2) (3) (4) Treatment -3.33 -3.83 (12.61) (12.67) Placebo -8.46 -8.85 (16.91) (16.865) # peers w/treatment 18.48 24.91 (7.97)** (10.6)** # peers w/placebo -9.63 -9.47 (8.49) (6.73) Baseline time allocation - Work 0.69 0.61 0.70 0.60 (0.02)*** (0.03)*** (0.02)*** (0.03)*** Constant 138.1 167.7 156.0 141.7 (79.4)* (81.8)** (87.2)* (74.9)* R2 0.3 0.18 0.3 0.18 N 1,280 1,317 1,280 1,317 23/07/2013 23 Treatment effects on time allocation - work
  • Treatment and Placebo Effects on Future-Oriented Behaviour * p<0.1; ** p<0.05; *** p<0.01; Screening site fixed effects not reported; Robust standard errors in parenthesis (1) (2) (3) (4) Treatment 19.97 19.84 (12.93) (13.04) Placebo 26.39 26.83 (12.79)** (13.01)** # peers w/treatment -0.74 -10.87 (6.60) (6.28)* # peers w/placebo 1.79 3.35 (6.52) (5.71) Baseline time allocation - Work 0.31 0.31 0.31 0.31 (0.03)*** (0.03)*** (0.03)*** (0.03)*** Constant 522.6 549.2 519.8 560.2 (34.2)*** (33.3)*** (34.9)*** (33.8)*** R2 0.07 0.07 0.07 0.07 N 1,284 1,322 1,284 1,322 23/07/2013 24 Treatment effects on time allocation - leisure
  • Treatment and Placebo Effects on Future-Oriented Behaviour Savings Savings Deposits Deposits Withdrawals Withdrawals (1) (2) (3) (4) (5) (6) Treatment 186.9 63.5 33.7 (106.4)* (22.3)*** (17.2)* Placebo 126.1 17.9 4.6 (95.1) (20.6) (9.3) # peers with treatment 34.3 -37.1 -5.4 (85.9) (11.9)*** (6.7) # peers with placebo -28.2 -7.0 7.7 (46.9) (10.5) (6.2) Baseline savings 0.741 0.658 -0.011 0.137 0.004 0.016 (0.578) (0.513) (0.011) (0.198) (0.017) (0.019) Constant -105.3 -24.9 80.9 24.1 55.2 32.7 (314.9) (271.4) (47.9)* (21.8) (108.1) (16.4)** R2 0.16 0.29 0.05 0.04 0.03 0.02 N 1,258 1,288 1,258 1,288 1,258 1,288 * p<0.1; ** p<0.05; *** p<0.01; Screening site fixed effects and controls for age, age², gender and education not reported; Robust standard errors in parenthesis Table 10 – Treatment effects on savings behaviour 23/07/2013 25
  • Treatment and Placebo Effects on Future-Oriented Behaviour Table A1 - Direct and indirect treatment effect on Locus of Control LOC others LOC others LOC internal LOC internal LOC chance LOC chance Treatment -0.027 0.083 -0.030 (0.051) (0.038)** (0.044) Placebo -0.015 -0.027 -0.028 (0.050) (0.039) (0.043) # peers w/treatment -0.056 -0.016 -0.059 (0.028)** (0.020) (0.023)** # peers w/placebo -0.002 -0.018 0.023 (0.028) (0.023) (0.025) Baseline LOC 0.196 0.212 0.089 0.098 0.166 0.144 (0.031)*** (0.030)*** (0.030)*** (0.030)*** (0.027)*** (0.025)*** Constant 1.720 1.736 2.726 2.684 1.900 1.911 (0.120)*** (0.127)*** (0.124)*** (0.123)*** (0.105)*** (0.104)*** R2 0.05 0.06 0.03 0.02 0.05 0.05 N 1,341 1,372 1,342 1,373 1,341 1,374 * p<0.1; ** p<0.05; *** p<0.01; Screening site fixed effects not reported; Robust standard errors in parenthesis 23/07/2013 26
  • Treatment and Placebo Effects on Future-Oriented Behaviour Table A2 - Direct and indirect treatment effect on Perception of Poverty * p<0.1; ** p<0.05; *** p<0.01; Screening site fixed effects not reported; Robust standard errors in parenthesis Poverty due to Fate Poverty Structural Poverty Individual Treatment -0.108 0.033 0.088 (0.048)** (0.038) (0.042)** Placebo -0.005 0.058 0.072 (0.048) (0.037) (0.042)* # peers w/treatment -0.048 -0.046 -0.011 (0.027)* (0.021)** (0.024) # peers w/placebo 0.008 -0.012 -0.005 (0.029) (0.023) (0.025) Baseline percept poverty 0.060 0.028 0.111 0.052 0.058 0.083 (0.031)* (0.031) (0.033)*** (0.030) (0.032)* (0.030)*** Constant 2.397 2.506 2.465 2.723 2.907 2.869 (0.116)*** (0.120)*** (0.120)*** (0.114)*** (0.124)*** (0.119)*** R2 0.02 0.02 0.02 0.03 0.03 0.03 N 1,339 1,368 1,337 1,368 1,339 1,370 23/07/2013 27
  • Observations  "Weak" treatment, but:  Documentaries affected aspirations, expectations, time allocation, savings behaviour, and 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; 23/07/2013 28