Egger, Dennis, Johannes Haushofer, Edward Miguel, Paul Niehaus, and Michael Walker. (2021). “General Equilibrium Effects of Cash Transfers: Experimental Evidence from Kenya”, forthcoming Econometrica.
How large economic stimuli generate individual and aggregate responses is a central question in economics, but has not been studied experimentally. We provided one-time cash transfers of about USD 1000 to over 10,500 poor households across 653 randomized villages in rural Kenya. The implied fiscal shock was over 15 percent of local GDP. We find large impacts on consumption and assets for recipients. Importantly, we document large positive spillovers on non-recipient households and firms, and minimal price inflation. We estimate a local transfer multiplier of 2.4. We interpret welfare
implications through the lens of a simple household optimization framework.
Self-control problems constitute a potential explanation for the under-investment in preventive health in low-income countries. Behavioral economics offers a tool to solve such problems: commitment devices. We conduct a field experiment to evaluate the effectiveness of different types of theoretically-motivated commitment contracts in increasing preventive doctor visits by hypertensive patients in rural India. Despite achieving high take-up of such contracts in some treatment arms, we find no effects on actual doctor visits or individual health outcomes. A substantial number of individuals pay for commitment but fail to follow through on the doctor visit, losing money without experiencing health benefits. We develop and structurally estimate a pre-specified model of consumer behavior under present bias with varying levels of naivete. The results are consistent with a large share of individuals being partially naive about their own self-control problems: sophisticated enough to demand some commitment, but overly optimistic about whether a given level of commitment is suffciently strong to be effective. The results suggest that commitment devices may in practice be welfare diminishing, at least in some contexts, and serve as a cautionary tale about their role in health care.
The WHO has recently debated whether to reaffirm its long-standing recommendation of mass drug administration (MDA) in areas with more than 20% prevalence of soil-transmitted helminths (hookworm, whipworm, and roundworm). There is consensus that the relevant deworming drugs are safe and effective, so the key question facing policymakers is whether the expected benefits of MDA exceed the roughly $0.30 per treatment cost. The literature on long run educational and economic impacts of deworming suggests that this is the case. However, a recent meta-analysis by Taylor-Robinson et al. (2015) (hereafter TMSDG), disputes these findings. The authors conclude that while treatment of children known to be infected increases weight by 0.75 kg (95% CI: 0.24, 1.26; p=0.0038), there is substantial evidence that MDA has no impact on weight or other child outcomes. We update the TMSDG analysis by including studies omitted from that analysis and extracting additional data from included studies, such as deriving standard errors from p-values when the standard errors are not reported in the original article. The updated sample includes twice as many trials as analyzed by TMSDG, substantially improving statistical power. We find that the TMSDG analysis is underpowered: it would conclude that MDA has no effect even if the true effect were (1) large enough to be cost-effective relative to other interventions in similar populations, or (2) of a size that is consistent with results from studies of children known to be infected. The hypothesis of a common zero effect of multiple-dose MDA deworming on child weight at longest follow-up is rejected at the 10% level using the TMSDG dataset, and with a p-value < 0.001 using the updated sample. Applying either of two study classification approaches used in previous Cochrane Reviews (prior to TMSDG) also leads to rejection at the 5% level. In the full sample, including studies in environments where prevalence is low enough that the WHO does not recommend deworming, the average effect on child weight is 0.134 kg (95% CI: 0.031, 0.236, random effects estimation). In environments with greater than 20% prevalence, where the WHO recommends mass treatment, the average effect on child weight is 0.148 kg (95% CI: 0.039, 0.258). The implied average effect of MDA on infected children in the full sample (calculated by dividing estimated impact by worm prevalence for each study and applying a random effects model) is 0.301 kg. At 0.22 kg per U.S. dollar, the estimated average weight gain per dollar expenditure from deworming MDA is more than 35 times that from school feeding programs as estimated in RCTs. Under-powered meta-analyses (such as TMSDG) are common in health research, and this methodological issue will be increasingly important as growing numbers of economists and other social scientists conduct meta-analysis.
Whether changes in climate substantially shape human conflict is a question of considerable recent interest to both academics and policymakers. Despite a substantial body of evidence for a strong association between climate and conflict, it remains widely claimed that large-sample empirical evidence linking climatic conditions and modern human conflict in Africa is mixed and thus any reported evidence for a strong association should be discounted. Theisen, Holterman, and Buhaug (henceforth THB) is one of the studies used to support this claim. Here we show that the results in THB are not inconsistent with earlier studies that report a substantial e ect of of climate on conflict. We demonstrate using power calculations and Monte Carlo simulations that even if a large association between climate and conflict existed in the data, the approach of THB would not be able to reliably distinguish this association from a null e ect, indicating that the approach taken by THB is statistically underpowered in this context. Therefore THB's analysis provides no basis for discarding earlier analyses and THB's conclusions drawn from this analysis overstate the extent to which they disagree with the literature. We also demonstrate that THB's stated advantage from using exceptionally high resolution data is unlikely to be realized in their analysis, since high resolution rainfall data was not actually collected in the majority conflict zones studied by THB. Although unremarked in the original analysis, the rainfall data in THB are interpolations of sparse and incomplete rainfall measurements.
Understanding the possible pitfalls of survey data is critical for empirical research. Among other things, poor data quality can lead to biased regression estimates, potentially resulting in incorrect interpretations that mislead researchers and policymakers alike. Common data problems include difficulties in tracking respondents and high survey attrition, enumerator error and bias, and respondent reporting error. This paper describes and analyzes these issues in Round 1 of the Kenyan Life Panel Survey (KLPS-1), collected in 2003-2005. The KLPS-1 is an innovative longitudinal dataset documenting a wide range of outcomes for Kenyan youths who had originally attended schools participating in a deworming treatment program starting in 1998. The careful design of this survey allows for examination of an array of data quality issues.
Theisen (JPR, 2012) recently constructed a novel high-resolution data set of intergroup and political conflict in Kenya (1989-2004) and examined whether the risk of conflict onset and incidence responds to annual pixel-level variations in temperature and precipitation. Thiesen concluded that only extreme precipitation is associated with conflict incidence and that temperature is unrelated to conflict, seemingly at odds with recent studies that found a positive association at the pixel scale (O'laughlin et al., PNAS 2012), at the country scale (Burke et al., PNAS 2009), and at the continental scale (Hsiang et al., Nature 2011) in Africa. Here we show these ndings can be reconciled when we correct the erroneous coding of temperature-squared in Thiesen. In contrast to the original conclusions presented in Theisen, both conflict onset and conflict incidence are significantly and positively associated with local temperature in this new and independently assembled data set.
Michael Kremer, Edward Miguel, Sendhil Mullainathan, Clair Null, and Alix Peterson Zwane
African DevelopmentEnvironment and ClimateHealthEducation and Human Capital
Kremer, Michael, Edward Miguel, Sendhil Mullainathan, Clair Null, and Alix Peterson Zwane. 2011. "Social Engineering: Evidence from a Suite of Take-up Experiments in Kenya." Unpublished Working Paper.
Many effective health products and behaviors available through the private market are not widely adopted in less developed countries. For example, fewer than 10% of households in our Kenyan study area treat their water with dilute chlorine. Using a suite of randomized evaluations, we find that information and marketing interventions do little to boost use of chlorine. However, chlorine take-up is highly sensitive to price, convenience and social context, with more than half of households using chlorine when an individually-packaged supply is delivered free to the home. The highest sustained take-up is achieved by combining free, convenient, salient, and public access through a point-of-collection chlorine dispenser system and a local promoter. More than half of households treat their water and this use continues 30 months later even though promoters are paid only for the first six months. The estimated long-run costs of this intervention at scale, including administrative costs, are between $0.25 and $0.50 per person per year.
This study exploits a new longitudinal dataset to examine selective migration among 1,500 Kenyan youth originally living in rural areas. We examine whether migration rates are related to individual "ability", broadly defined to include cognitive aptitude as well as health, and then use these estimates to determine how much of the urban-rural wage gap in Kenya is due to selection versus actual productivity differences. Whereas previous empirical work has focused on schooling attainment as a proxy for cognitive ability, we employ an arguably preferable measure, a pre-migration primary school academic test score. Pre-migration randomized assignment to a deworming treatment program provides variation in health status. We find a positive relationship between both measures of human capital (cognitive ability and deworming) and subsequent migration, though only the former is robust at standard statistical significance levels. Specifically, an increase of two standard deviations in academic test score increases the likelihood of rural-urban migration by 17%. Accounting for migration selection due to both cognitive ability and schooling attainment does not explain more than a small fraction of the sizeable urban-rural wage gap in Kenya, suggesting that productivity differences across sectors remain large.