Is it a moral imperative to pay people above-market wages?

I just finished an intense period of training and evaluation for my project staff, and made final selections for my team of supervisors and enumerators. They are a very talented group, and I’m quite happy with my final team, but getting here was a pretty stressful journey. One reason for the stress is that I used a fairly standard approach of starting with more people than I needed and constantly evaluating them over the first couple of weeks before making cuts.

Another was deciding what to pay people. The Malawi Kwacha was devalued earlier this year, altering the official exchange rate and allegedly changing many prices. In actuality, though, most imports had already been bought nigh-exclusively on the black market, or using foreign currency bought at black market rates, for quite some time, so that the devaluation actually lowered some prices. For example, fuel was almost all black-market before the devaluation, and the going rate was 500 kwacha or more; now it’s at 485 kwacha, and until three days ago it was 441. I consulted extensively with other researchers on how to adjust my pay and in the end I kept it flat relative to what I paid last year. This puts me at a slightly lower pay scale than most local research organizations, which to my thinking is justified due to my lower budget and the fact that I’m selecting people with lower qualifications and less experience (but hope to move them up if they do well).

This means that my enumerators, for example, earn around ten times what they could otherwise make doing piecework labor, assuming such jobs are available. Some people I’ve talked to have argued that foreign researchers are morally obligated to pay even more than that, since the pay for foreign researchers’ Malawian staff is really low relative to our own incomes. On the one hand, I sympathize with that argument – I’m a development economist for a reason! – but on the other, it doesn’t strike me as an unmitigated good to set a really high pay floor for my research team. High incomes are awesome, and you’ll never hear me say otherwise, but high wages have other consequences besides increasing my workers’ incomes.

One such unintended consequence is similar to what you’d see with a binding minimum wage in a competitive market: the more I pay, the fewer workers I can hire. From the perspective of benefits to Malawians, is it better to hire one worker at MK 50,000 per day, or 50 and MK 1,000 per day? There’s actually an answer, at least from an economist’s viewpoint – the latter almost surely maximizes social welfare, since the marginal utility of money is decreasing. If you have no income at all you will likely die, but after you have 49,000 kwacha on a given day, another 1,000 doesn’t matter too much.

Another consequence is that there is a strong tendency for the very best talent in the country to gravitate toward working as a researcher. My UM colleague (and co-advisee under Rebecca Thornton) Susan Godlonton has done some descriptive work on this as background to her research on labor markets here: fully one third of people at the high end of the skill distribution in urban Malawi have worked on research projects. That’s great for the specific Malawians in question – they’re seeking those jobs since doing so maximizes their own well-being – but again, less obviously good for society as a whole. As I noted elsewhere, tons of super-smart, super-educated people who might otherwise start their own businesses and eventually employ their less-educated countrymen are instead trying to get jobs doing stuff like driving cars for the UN or conducting surveys. The more wages for research rise, the stronger this tendency is likely to be.

The other aspect of my choice is a deliberation on how much I’m actually paying my staff, in real terms. The nominal exchange rate is probably misleading, since a dollar goes farther here than it does in the US. But I’m dubious that the official purchasing-power adjustments are right either. I’m going to come back to this in the near future, and discuss how we should think about the value of pay in a developing country.

The silly and wonderful sides of Malawi's press

Academic Progress Goes Clunk has been doing a series of posts on amusing news articles from Malawi. She’s got one up about their mocking presentation of former president George W. Bush, and another about some ladies in Chinamwali being chased by a huge rat. Via Johanna Chuan, here’s another great one: for a while news outlets here were circulating a fabricated story about Secretary of State Clinton being chased out of the country by bees.

Stories like the bee story and the “giant rodent” thing appear pretty regularly in the papers here, since there aren’t separate tabloid newspapers. Last summer, my colleague Justin Schon often expressed a low opinion of the quality of the news here, compared to the US. I’m not totally in agreement with him on this: the articles do seem to lack some depth and details, especially context for ongoing stories. On the upside, you can get a sense of what’s going on pretty fast, usually just from the headline. I think this is aided by the small size of the country, and the proportionally even smaller size of the number of newsmakers here. The papers tend to cover every turn of a story on a daily basis.

Another strength of the Malawian press, often highlighted by ZCT researcher Pierre Pratley, is their socially-conscious choice of content. US media is dominated by sexy stories that sell (cf. the constant stream of headlines about attractive white girls who have disappeared or been killed). A lot of the news content here, in contrast, seems designed to highlight issues of poverty, female empowerment, and so forth, particularly on the inside pages of the papers. On net the news here may be better and less exploitative than the product we get in the US, even if the quality of the writing and the depth on any given piece is lower.

Is Malawi dangerous (for me)?

I’ve been updating here somewhat less since I’m now mostly out at my project’s field site, at a trading center in rural TA Mwambo. There in particular, and in Africa and Malawi in general, people worry about my safety. It’s basically taken for granted that Africa is a scary and dangerous place where I am likely to die. There’s some evidence for this view – I’m aware of a several cases of robbery against azungu researchers in Malawi, some of them extremely violent. And as I pointed out before, the death rate is much higher here than in the US.

But I’m not so readily convinced – that’s an unconditional mortality rate, and it’s dominated by, if not exclusively for, native-born Africans. Very few of the factors that raise the death rate for Africans have any bearing on me, just because I come here: I don’t face the same level of poverty or early-childhood malnutrition and disease, and even the limited health system is less of an issue for someone who carries mandatory MedEvac insurance. I do face the overall disease burden, but I’m fairly fastidious about HIV and malaria prevention.

What about crime and violence? Am I more likely to be the victim of a crime here? I noted above that there are lots of examples of horrific and violent burglaries here. But I’ve been robbed repeatedly in the US as well; at one pointing my house in a not-so-great part of San Francisco was robbed three times in a week, once when we were home. I also know about awful home invasions in America, some worse than I’ve heard of here. The counterargument is that my knowledge of Malawi goes back maybe 10 years (via hearsay and stories I’ve heard firsthand), as opposed to nearly 30 in the US. There’s no questioning that the US has tons of violence, though: twice in the past two weeks, crazy assholes have gotten powerful small arms and murdered tons of people for no reason there. That sort of thing basically doesn’t happen in Malawi, although there are parts of Africa where it does.

On balance, I’m not sold on this being a vastly less safe place than the US. Sure, I could still be killed by a snake or an elephant, but those are actually a lot rarer in Africa than National Geographic would have you believe. I did, however, experience the small joy of a live frog hopping under the door and into my rest house room. As a child I was pretty obsessed with frogs and never had much chance to find them, so this was pretty awesome, but the poor little guy was terrified, probably had poisonous skin, and had lots of claws and spines, so scooting him out of my room to safety was kind of nerve-wracking.

Enumerator screening isn't all bad

Today we did a marathon of recruiting and screening candidates to be enumerators on my project. This is a fairly exhausting process of posting signs and spreading the word, administering exams, grading, and conducting the same interview ~30 times in a row (thus giving me a wonderful insight into the insane tedium of survey enumeration).

The worst part of this process is that it takes all day, but that’s also the best part – today was a gorgeous, slightly foggy day in the Shire Highlands. Heading down to the bus depot, I got to see the sun rise over the Zomba Golf Course.

Coming back to Zomba from Jali, we chased the sun as it crashed into the Zomba Plateau. I wasn’t fortunate enough to get a clean picture of that through the window of our minibus, but I did get this shot of the beautiful and typically African sunset over the trading center.

Compensate your survey respondents. Why is this even a question?

Andrew Gelman links to Casey Mulligan’s take on whether survey respondents should be compensated for their time. Mulligan suggests that from the researcher’s perspective, paying people might lead to better results. But he seems to miss the most important reason for paid surveys leading to better data quality: running an unpaid survey means that your refusal rate will be an increasing function of how much respondents value their time (and their impatience, and a few other thing). Your wonderful random sample is now no longer representative of the whole population. This is maybe okay, but you don’t actually know the selection process. Also, the value people put on their time is, in rough approximation, equal to their wages. Wages are a common outcome variable in analyses, and as I taught my undergraduate econometrics students last term, selecting your sample on the outcome variable means your estimates will be biased – in layman’s terms, you’ll get the wrong answer.

Mulligan’s piece reminds me of Chris Blattman’s post on this same topic last year. He discusses two possible problems with paying, raised by Aine McCarthy. The first is that people might pay less attention or participate for the wrong reasons; Blattman points out that it’s possible to run an experiment to study that stuff. They both seem unlikely to me, though.

But the second issue Blattman discusses is just bizarre to me – the idea that we might establish a social norm of paying people for their time (okay, plausible) and that that somehow is a bad thing (wait, really?). I’ve seen this suggestion from a number of corners, and I don’t get it. You’re taking something of value from someone (a chunk of their time, sometimes more than a whole day); a norm that says they should be compensated for that is a great idea. These aren’t stray cats that we’re thinking about feeding – they’re people, who have other stuff going on, and, as I’ll discuss, may feel obliged to participate.

One concern often raised by non-economists and mentioned in the comments on Blattman’s post is that paying people, especially if you pay them too much relative to their income, is coercive. Maybe it’s indicative of my training as an economist that I find that argument confusing. Are jobs “coercion”? Those mostly involve being paid enough to do something you dislike.

But that’s beside the point here in Malawi, and probably in lots of other places as well. Despite researchers’ best efforts to ensure respondents that our surveys are voluntary through the informed consent process, virtually no one refuses. I’ve heard that this is because some government surveys are legally mandatory. I would feel terrible imposing on someone who thinks they are required to participate and not at least try to make it worth their while. It seems very much like stealing to me, and an abuse of my status and power in the places where I do research.

Malawi is on fire

It has been a dry year here in Zomba District. I’ve heard that in some areas the price of maize is spiking to record levels and the harvest was very bad. Experts are forecasting that Lake Chilwa, source of one fifth of the country’s fish catch, will dry up this year. I don’t have the experience to say much about either of those facts, but I’ve observed one striking contrast to last year: the countryside is ablaze. On a nightly basis, you can spot walls of flame spreading in irregular circles on the sides of local hills . A few weeks ago a huge wildfire covered much of Chikowi Hill. Since then brush fires have been a regular feature of the night sky. Tonight, when I came home, I could see one burning its way across Chinamwali Hill. Light pollution from the neighbor’s house made getting a picture tough, but you can still make it out – the chain of three orange-red dots:

Here’s another one above Mulunguzi from about a month ago:

Why don't African leaders die more often? And why do Africans die so much?

A recent AllAfrica.com piece wonders why African leaders keep dying. It does seem to happen a lot – Bingu here in Malawi, Mills just recently in Ghana, and Yar’Adua in Nigeria in 2010 come to mind immediately, and there are many other examples as well. The piece speculates that this is due to their more advanced age – playing to the stereotype of the President-for-life African strongman. dadakim counters with the surprising fact that African leaders aren’t in fact much older than executives from elsewhere, given the famous examples of extremely long tenure here. This is a really encouraging sign of improving governance.

Given that age is a non-starter, the next place to look is population-average mortality in Africa. I know that it’s high, although I didn’t know offhand exactly how much higher it is than in other places. Fortunately it’s easy to look up: according to Anderson and Ray (2010) , the age-specific mortality for men age 60-64 is 37.2 per 1000 people in Africa and 14 in developed countries.* In percentage terms, those are 3.72% and and 1.4% respectively.  The AllAfrica piece argues that the mortality of African presidents is 15% since 2008 (8 deaths since 2008 for 54 countries). I’m dubious about this kind of analysis since you can cherry-pick start and end dates to get any kind  of impressive number you want. For example, if we start and end this analysis on last week Tuesday, the mortality rate of African leaders was 2% per day, or 675% per year. If we pick Wednesday instead, the mortality rate is a much more reassuring 0% per year.

But let’s roll with it. 4.5 years have passed since January 2008. Sticking with a linear approximation, we get an approximate annual mortality for African leaders of 3.28% over that period. So the answer is that African leaders are about half a percentage point less likely to die in any given year than their non-executive countrymen of the same age range.

So a better question to ask is why Africa’s leaders don’t die more often? The obvious answer is that they have better access to healthcare than their countrymen. But that doesn’t always work out too well for them – Bingu’s desperate attempt to get to a South African hospital was a failure – which highlights the risks, even to elites, of having a low-quality health care system.

You might have noticed above that the average person in a developed country, aged 60-64, faces a mortality risk of just 1.4% per year. In a very real sense, it is better to be a random American or European than even an elite in a low-income country. High mortality is a part of life here, showing up both in the news and in the huge numbers of coffin shops you pass on the side of the road. From a vast burden of disease to poor early-childhood nutrition to shoddy, under-staffed, and under-stocked hospitals to even the low quality of roads, the reasons for this are legion.

*kim estimates the average age to be 62, and if I understand the history correctly, which I probably don’t, there are only 2 female leaders in African history, Sirleaf since 2006 and Banda starting this year.

Isn't the HIV pandemic just due to a lack of education?

I get this question all the time. The answer is no.

It’s very common to assume that places with severe HIV epidemics are only that way because people there don’t know what it is or how it works. That’s not true at all. I’m going to limit my discussion here to Malawi, the country with the 9th-highest national HIV prevalence in the world. Although I’d assume the patterns are similar elsewhere in the high-prevalence southern cone of Africa, it doesn’t really matter if they are. The folk theory I’m addressing assumes that HIV education, meaning basic knowledge of transmission and prevention, is sufficient for stopping an epidemic. Malawi is a case where this kind of knowledge is high, but the epidemic is still going fairly strong. Therefore there is no way that HIV education alone is the answer, at least not the way it is typically done.

How do we know that Malawians are aware of HIV and how to prevent it? The Demographic and Health Surveys (DHS) have been running population-based surveys on probability samples of many developing countries for a long time now, and they have included questions on HIV prevention for quite a while. In Malawi’s case, these questions go back to 1992. These surveys allow us to estimate the share of people age 15-49 (the key age range for the virus) who understand a range of basic facts about HIV prevention. You can look them up yourself at hivdata.measuredhs.org, but to save time (and because I want to show people this stuff all the time) I did this and made a PDF of all the HIV prevention questions for Malawi across four rounds of the DHS survey. Click here to take a look.

The statistics are fairly impressive. 99.4% of Malawians have heard of HIV. Based on the survey’s measure, nearly 60% have no incorrect beliefs about its transmission. What about prevention? We usually emphasize the ABCs (Abstinence, Be Faithful to One Uninfected Partner, and Condoms), and 79%, 87%, and 72% of . Even more striking, nearly three quarters of Malawians knew whether or not mosquitos can transmit HIV. Do you know whether they can? Anecdotally, most Americans get this wrong. The answer is in the PDF – guess before you take a look.

This quantitative data is  consistent with other data I’ve collected, and might understate people’s knowledge. In a survey of over 400 people I helped run last summer, 98% of respondents stated that condoms provide at least some risk reduction over unprotected sex, and most people thought the risk benefits were massive. The average person in the area thinks that condoms reduce the risk of contracting HIV by 81 percentage points per sex act.

It’s also consistent with informal conversations and other non-quantitative evidence I’ve collected here. Lately I’ve been testing materials for my imminent project, and at one point in my information treatment (about HIV) I ask people if they have any questions. I have fielded a number of highly sophisticated questions – for example, one woman, who was still in high school, asked if taking ARVs meant that your sex partners might contract a resistant strain of the virus. The answer is yes, but the fact that she knew to ask that question is indicative of the extremely rich information environment here with respect to HIV. Not all of that information is 100% accurate – hence my project – but awareness and knowledge of the disease are extremely high.

So awareness alone is not the answer. What is the answer? We don’t know. If we knew for sure why HIV is a catastrophe  here in Southern Africa and never much more than a moderate problem anywhere else in the world, we could probably do something about it.

The rise of women drivers – and drivers in general – in Malawi

Karissa Gall at moni malawi has a recent post about how more and more drivers in Malawi are women. This is cool stuff, and part of an overall rising tide of women’s rights that seems to be going on here, and advanced considerably by the nascent presidency of Joyce Banda. There is a long way to go – Gall cites statistics that place Malawi at the bottom of a number of league tables of women’s rights. But the theme of the article implies that the increase in the number of women learning to drive is being impelled by a range of economic factors, and those are trends that I expect to continue. It’s a pattern consistent with my Amartya Sen-esque view on the importance of economic development: it’s not incomes and jobs that matter per se but the freedom they give people to live better lives, according to their own standard of “better”.*

Some evidence for the continued process of economic development here comes from my own observations of drivers on Malawi’s roads. There are a disproportionate share of vehicles emblazoned with driving school logos here, and they uniformly drive almost absurdly slow. The huge numbers of student drivers are partly a good sign and partly a signal of some of the issues of corruption and bureaucratic inefficiency that I have heard plague driver’s licensing here. If you want a license, I’ve been told, you either need to take a long sequence of lessons, or you just pay the right person an extra fee and get one right away.

*I’m not particularly pro-consumerism, but I’m also deeply skeptical of a view of development as an insidious process of American cultural imperialism. It is very hard to find American brands here (other than Coke). More on this later.

Amazon vs. the tyranny of four-year degrees for all

Amazon has a new program for their employees, The Amazon Career Choice Program, that covers the cost of technical and associates degrees in in-demand fields. This is great news, and not just for the generic corporate social responsibility/”giving back” type of reason. If that’s all this was, then they could have put the same money toward regular college degrees.

No, this is great because it challenges the current received wisdom about higher education: that everyone should go to college (meaning they should go straight from high school to a four-year institution in pursuit of a bachelor’s degree) and that people should just study whatever interests them in college, without consideration of whether it’s going to be worthwhile later. The financial benefits of a four-year degree are fairly well-established, but most economists think at least some of that is due to “signaling” – indicating how talented you are – rather than due to actual benefits from going to school. This means that people who start college but don’t finish may get little benefit, or even pay a penalty since they’d be sending a negative signal about their ability. Breaking out of this system would be great for everyone, as would developing educational pathways for people who don’t want a bachelor’s degree. Imagine a world where someone who just wants to go into a specific field could get training to do it, without indicating to potential employers that they’re not smart enough for college.

One of the complaints I’ve seen about the program is that Amazon is being cheap, or that it should really cover college degrees. I strongly disagree. First, college isn’t automatically for everyone. Second, this program covers associate’s degrees, which in some states (California, for example) are a great way to get started toward a four year degree while a) not committing to it from the beginning, b) still getting something useful if you stop after two years, and c) spending far less money. Promoting associate’s degrees would be a great option for letting people opt out of the ideational hegemony of “college for all” while still letting folks try it out to see whether it’s a good idea. Amazon is staking out a position on the nearly-nonexistent other side of the higher education debate, and I’m optimistic that this program could do a lot to promote the acceptability of alternative educational paths.

Hat tip: Andrew Hamada on facebook