This paper develops and tests a model of risk compensation that allows for “fatalism”: higher risks lead to more risk-taking, rather than less. Fatalism can be rational if the risk of each act exceeds a threshold value. I test this prediction by randomizing the provision of information about HIV risks in Malawi, and use a novel method to decompose the risk elasticity of sexual risk-taking by people’s initial risk beliefs. Matching the model’s predictions, this elasticity varies from -2.3 for the lowest to 2.9 for the highest beliefs. Fatalistic people, who have a positive elasticity, comprise 14% of the population.
We study a savings technology that is popular but underutilized in developing countries: short-term deferred compensation, which replaces regular wage payments with a single, later lump sum. Workers who are randomly assigned to lump-sum payments spend 25% less of their income immediately and are five percentage points more likely to purchase an artificial investment. These effects are likely due to savings constraints: 72% of workers prefer deferred payments, and rationalizing workers’ choices without savings constraints requires implausibly low discount factors. Although workers report temptation spending as an important driver of savings constraints, we find little evidence for that mechanism.
Relatively small changes to the inputs used in education programs can drastically change their effectiveness if there are large trade-offs between effectiveness and efficiency in the production of education. We study these trade-offs using an experimental evaluation of a literacy program in Uganda that provides teachers with professional development, classroom materials, and support. When implemented as designed, and at full cost, the program improves reading by 0.64 SDs and writing by 0.45 SDs. An adapted program with reduced costs instead yields statistically-insignificant effects on reading – and large negative effects on writing. Detailed classroom observations provide some evidence on the mechanisms driving the results, but mediation analyses show that teacher and student behavior can account for only 6 percent of the differences in effectiveness. Machine-learning results suggest that the education production function involves important nonlinearities and complementarities – which could make education programs highly sensitive to small input changes. Given the sensitivity of treatment effects to small changes in inputs, the literature on education interventions – which focuses overwhelmingly on stripped-down programs and individual inputs – could systematically underestimate the total gains from investing in schools.
“Peers and Motivation at Work: Evidence from a Firm Experiment in Malawi” (with Lasse Brune and Eric Chyn)
This paper sheds light on the nature of workplace peer effects by analyzing an experiment with a tea estate in Malawi. We randomly allocate tea-harvesting workers to locations on fields to estimate the impact of peers on worker performance. Using data on daily productivity, we find strong evidence of positive effects from working near higher-ability peers. Our estimates show that increasing the average of co-worker ability by 10 percent increases ownproductivity by about 0.5 percent. We find nonlinearities in the magnitude of peer effects across the distribution of own-ability: peer effects are the largest for the lowest ability workers. Since workers receive piece-rates and there is no team production, peer effects in our setting are not driven by production or compensation externalities. In additional analysis, we find evidence against learning or worker socialization as mechanisms. Results from an incentivized choice experiment suggest instead that peer effects in this context are driven by co-workers as a source of “motivation.” When given a choice to be re-assigned, the majority of workers want to be assigned to be near a fast (high-ability) coworker, even if switching is assigned an explicit cost. In open-ended survey responses, workers with demand for high-ability peers state that working near faster peers provides motivation to work harder.
“Enumerator Knowledge Effects in Subjective Expectation Elicitation: Evidence from a Randomized Field Experiment”
Subjective expectations about probabilities and the distributions of variables play a central role in modeling economic behavior. Direct elicitation of subjective beliefs via surveys is an increasingly popular tool, and recent research has shown that this is feasible even in low-income and low-numeracy settings. However, the enumerated surveys commonly used in developing countries have a potential weakness: respondents’ recorded beliefs may be affected by the enumerators’ knowledge about the belief questions. I show the importance of this issue using a randomized experiment that used enumerators to implement an information treatment. Reported beliefs are significantly shifted by the enumerators’ knowledge, decreasing by about 0.3 SD of the initial belief distribution. I discuss several mechanisms that may drive this phenomenon, including how the change in knowledge may have affected “probing” that enumerators did to encourage guesses when a respondent said they did not know the answer. These particular results are specific to my experiment; however, given the disparities in education levels between enumerators and respondents in typical developing-country surveys, the issue of enumerator knowledge contamination of subjective expectation data may be widespread. I suggest corrections for this issue from the perspectives of enumerator recruiment, survey design, experiment setup, and data analysis.
“The Impact of Teacher Effectiveness on Student Learning in Africa” (with Julie Buhl-Wiggers, Jason T. Kerwin, Rebecca Thornton, and Jeffrey A. Smith)