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Pathways less explored (aerc 2015)
1. 28/12/2015 1
Pathways Less Explored – Aspirations, Locus of Control,
and Agricultural Transformation
Alemayehu Seyoum Taffesse (IFPRI),
Fanaye Tadesse (IFPRI)
African Economic Research Consortium (AERC)
Plenary Session on
“Agriculture and Structural Transformation in Africa”
November 29 – December 3, 2015
Addis Ababa, Ethiopia
2. Motivation
State of African Agriculture (no statistics)
Pathways less explored – psychological and social influence
that can complement, accelerate
Conceptual issues
Two concepts – Aspirations, Locus of control
A schema
Applications to Ethiopia
LOC and adoption of modern farm inputs;
Summary of work on aspirations
Observations – so what?
Outline
28/12/2015 2
3. Motivation – State of Agriculture
28/12/2015 3
Summary – Outcome state
low and slow-growing productivity,
Summary – Conditioning states
limited capital stock (physical, human, infrastructural, natural),
weak institutions (imperfect markets, property rights, civil service
including agencies of public service delivery, early-warning and
emergency assistance systems);
exposure to shocks (natural, market, political);
Policy Instruments
public investment (research and extension services, education, health,
infrastructure);
reforms – effective policy making process, land reform, public sector
reform, incentives (taxes and subsidies, interest rates, regulation);
Question: Are there complementary pathways not yet used?
4. Motivation – why do poor people underinvest?
28/12/2015 4
Underinvestment by the poor – a source of persistence in low
productivity, poverty, and inequality
Focus 1 - ‘external circumstances’ and ‘opportunities’.
Low returns to investments; Unexploited opportunities due to lack of
information or knowledge; Social constraints;
Conceptual – ‘opportunities’
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
5. Conceptual Issues – Two Concepts
28/12/2015 5
Aspirations (Lewin, Simon, Appadurai, Ray, Bernard et al):
are goals or preferred boundary-states with respect to a relevant
domain of choice (future-oriented);
differ from expectations – preferences vs. beliefs;
important for analysing and/or addressing behaviour – motivators,
heterogeneous, context-dependent and changing;
Locus of Control (Bandura, Rotter, Levenson, Hill):
a person’s belief regarding the primary causation of events in his or
her life in general or in a specific area;
‘internal’ vs. ‘external’;
deemed a powerful influence on personality and behaviour;
used to predict behaviour in a lot of spheres (health, education,
employment …)
6. 28/12/2015 6
Conceptual Issues – A Schema
Preferences -
Aspirations
Aspirations
gap
Preferences -
Others
Experience
(personal,
collective;
including
shocks)
Figure 1: Conceptual Schema
Beliefs (locus of
control, self-
efficacy,
expectations. ...)
Behaviour
or actions
Environment
(economic,
cultural, natural,
institutional, …)
7. 28/12/2015 7
Premise – Poorer households use less modern inputs
Low productivity and poverty
persist;
.3.4.5.6.7
1 2 3 4 5
5 quantiles of wealth_index
95% CI predicted fert_use
.1
.15
.2
.25
.3
.35
1 2 3 4 5
5 quantiles of wealth_index
95% CI predicted improved_seed
36% - Fertilizers
121% - Improved Seeds
Chemical fertilizers and
improved seeds = 20% of
crop yield growth during
2005-2013 in Ethiopia
(Bachewe et al. (2015))
8. 28/12/2015 8
Premise – LOC a possible pathway
Measuring LOC: Binary
Survey
LOC-
Destiny (%)
Number of
Observations
Ethiopia - PSNP 2008 25.8 4,360
Ethiopia - ERHS 2009 30.9 2,068
Ethiopia - PSNP 2010 32.3 4,619
Ethiopia - Aspirations Survey 2010-11 37.7 2,068
Ethiopia – AGP Baseline Survey 2011 35.3 7,896
IFPRI Pakistan Household Survey 2011 58.1 1546
Malawi Rural Household Survey-2011 27.0 671
Ethiopia - FTF Baseline Survey 2013 30.3 6903
Ethiopia – Transport Survey 2014 31.4 775
“Each person is primarily responsible for his/her success or failure in life.”
“A person’s success or failure in life is a matter of his/her destiny.”
9. 28/12/2015 9
Premise – LOC a possible pathway
Locus of control – pared down version of Levenson (1981)
C To a great extent my life is controlled by accidental/chance happenings.
O I feel like what happens in my life is mostly determined by powerful people.
I When I make plans, I am almost certain/guaranteed/sure to make them work.
C Often there is no chance of protecting my personal interests from bad luck happenings.
C When I get what I want, it’s usually/mostly because I’m lucky.
C My experience in my life has been that what is going to happen will happen.
O My life is chiefly controlled by other powerful people.
O
People like myself have very little chance of protecting our personal interests when they
conflict with those of more powerful people.
C
It’s not always wise for me to plan too far ahead because many things turn out to be a matter
of good or bad fortune.
O
Getting what I want requires making those people above me (people with higher status)
happy with me.
I I can mostly determine what will happen in my life.
I
I am usually able to protect my personal interests (I can usually look after what is important to
me)
I When I get what I want, it’s usually because I worked hard for it.
O
In order to have my plans work, I make sure that they fit in with the desires of people who
have power over me.
I My life is determined by my own actions.
Measuring LOC: Four-level (Likert-type) semantic scale (Strongly disagree,
Disagree, Agree, Strongly agree)
10. 28/12/2015 10
Results – LOC and Wealth
7
7.5
8
8.5
9
1 2 3 4 5
5 quantiles of wealth_index
95% CI predicted LOC_others
11.5
12
12.5
13
13.5
14
1 2 3 4 5
5 quantiles of wealth_index
95% CI predicted LOC_internal
8.28.48.68.8
9
9.2
1 2 3 4 5
5 quantiles of wealth_index
95% CI predicted LOC_chance
Poorer individuals have
lower (higher) internal
(external) locus of control (7-
17%);
Also holds for the AGP and
Transport Surveys;
7
7.5
8
8.5
9
1 2 3 4 5
5 quantiles of wealth_index
95% CI predicted LOC_others
11.5
12
12.5
13
13.5
14
1 2 3 4 5
5 quantiles of wealth_index
95% CI predicted LOC_internal
11. 28/12/2015 11
Results – LOC and Wealth
LOC-
Internal
LOC-
Chance
LOC-
Others
Gender (Male=1)
0.353*** -0.324*** -0.424***
(0.128) (0.125) (0.133)
Age (Years)
0.007 0.004 -0.012
(0.020) (0.021) (0.021)
Schooling (Years)
0.068*** -0.004 -0.03
(0.024) (0.024) (0.023)
Wealth Quintile
0.183*** -0.136*** -0.185***
(0.065) (0.041) (0.043)
Constant
12.246*** 8.956*** 8.757***
(0.480) (0.512) (0.532)
Number of Observations 5925 5925 5925
The LOC-Wealth relations hold after controlling for age, gender, and
schooling of the respondent
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Results – LOC and Aspirations
Item Overall Aspiration
Gender (Female=1)
-0.159
(0.000)***
Age (years)
0.003
(0.088)*
Age Squared (years)
-0.00
(0.020)**
Highest grade of schooling completed
0.132
(0.000)***
Wealth
0.013
(0.608)
Locus of control - Chance
0.034
(0.152)
Locus of control - Powerful Others
-0.004
(0.907)
Locus of control - Internal
0.106
(0.000)***
Constant
-0.486
(0.001)***
N 1631
Villages 63
F( 8, 55) = 32.20 0
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Hypothesis – LOC and Poverty
Poorer individuals have lower internal (higher external) locus of
control;
A feedback loop linking LOC and poverty?
Poverty lowers internal LOC, but is not a complete determinant;
Weak internal (or strong external) LOC discourages ‘investment’ by
the poor;
Poverty persists …
Explore the hypothesis in relation to adoption of modern inputs by
farmers in rural Ethiopia
Three surveys – AGP (2011), FTF (2013), Transport (2014)
14. 28/12/2015 14
Specification – Modern Input Use
Specification - Probit (Multivariate Probit) regression of fertilizer use,
improved seed use:
Controls:
Respondent’s sex, age, schooling, LOC scores;
Household wealth;
Number of working-age male members in the household,
Household landholding (hectares),
Soil fertility,
Slope of plot,
Access to extension services (yes=1),
Land certification,
Average distance of parcels from the homestead (minutes),
Distance to a permanent market (km),
Fraction of landholding cultivated with cereals,
Off-farm and/or non-farm income (yes=1),
Access to credit (yes=1), rainfall (mm in logs)
15. 28/12/2015 15
Results – LOC and Modern Input Use
Marginal Effects
(FTF Survey (2013))
Fertilizer use Improved seed
Locus of Control - Chance
-0.012*** 0.000
(0.003) (0.002)
Locus of Control - Internal
0.003 0.003
(0.003) (0.002)
Gender of Household Head (Male=1)
-0.014 -0.032*
(0.019) (0.016)
Age of Household Head (Years)
-0.001 -0.003
(0.003) (0.002)
Schooling of Household Head (Years)
0.009** -0.001
(0.003) (0.003)
Wealth Quintile
0.043*** 0.035***
(0.009) (0.007)
Number of Observations 5639 5639
Wald test 311.04 124.89
P-values 0.000 0.000
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Results – LOC and Modern Input Use
Marginal Effects
(AGP Survey (2011))
Fertilizer use
Improved
seed
Locus of Control - Chance
-0.001 0.000
(0.003) (0.002)
Locus of Control - Internal
0.002 0.001
(0.003) (0.002)
Gender of Household Head (Male=1)
0.075*** 0.039***
(0.017) (0.012)
Age of Household Head (Years)
0.010*** 0.005**
(0.002) (0.002)
Schooling of Household Head (Years)
0.012*** 0.006**
(0.004) (0.002)
Wealth Quintile
0.011 -0.003
(0.007) (0.005)
Number of Observations 7445 7424
Wald test 414.64 250.61
P-values 0.000 0.000
17. 28/12/2015 17
Results – LOC and Modern Input Use
Marginal Effects
(Transport Survey (2014)
Fertilizer use
Improved
seed
Locus of Control - Chance
-0.002 -0.002
(0.003) (0.004)
Locus of Control - Internal
0.007** 0.012*
(0.003) (0.006)
Gender of Household Head (Male=1)
0.230** 0.083*
(0.093) (0.049)
Age of Household Head (Years)
0.002 0.009
(0.005) (0.010)
Schooling of Household Head (Years)
-0.008 -0.019
(0.010) (0.018)
Wealth Quintile
0.028*** 0.042***
(0.006) (0.016)
Number of Observations 776 776
Wald test 519.38 160.34
P-values 0.000 0.000
18. 28/12/2015 18
Summary
Internal locus of control correlates with higher likelihood of
adopting modern inputs (chemical fertilizers and improved
seeds), while chance locus of control is linked with lower
likelihood.
The size of the correlation is comparable to that with
schooling.
Heterogeneity of circumstances matter for the association;
remoteness (Road Survey),
access to extension services (AGP Survey), …
19. Summary – Bernard et al. (2015b)
Results (based on ERHS, Insurance panels)
Poorer individuals have on average lower aspirations;
Results persist across specifications;
Panel data used, but happy to consider them as correlations;
Issues
Measurement – revealed vs. declared – develop an instrument
Identification – correlations vs. causal links (poverty–low
aspirations) – field experiment
28/12/2015 19
20. Do people’s aspirations affect whether they invest?
Randomly assign Ethiopian farmers to watch videos about the lives of
four role models.
Treatment = one hour of documentaries.
No other intervention.
Very good balance at baseline across groups.
Key findings:
Improvements in aspirations after screening and after six months.
Changes in related psychosocial characteristics (LoC), but not risk
aversion or time preferences.
Small improvements in savings, credit, demand for credit, children’s
school enrolment and spending on schooling 6 months after
screening.
Repeat survey coming up, production-side data to be collected.
,
Summary – Bernard et al. (2015a)
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21. 28/12/2015 21
Observations
So what? Any policy implications? [WDR (2015)]
Ascertain the nature and extent of “psychological and social
influences” that affect behaviour – “desirable, possible,
‘thinkable’”;
Relevance to policy design (complementary to incentives):
Focus both on ‘what’ and ‘how” – timing, labelling, simplifying,
reminding;
Understand target communities – norms, identity;
Examples form the suggestive evidence above:
Poor vs. non-poor – same delivery modality may not work;
Male vs. female – additional reason to enhance women
empowerment in agriculture;
Motivational devices, Role models
A lot to be learnt – more research and experimentation