The Aggregate Impact of Household Saving and Borrowing Constraints: Designing a Field Experiment in Uganda
- (pp. 171-76)
Abstract
We develop a model of households with multiple needs (smoothing shocks, financing investment) and constraints (limited credit, self-control issues) in order to examine the nature of household's financing constraints in a developing country, and the impact of relaxing them. We show that increased access to credit has very different implications for the aggregate model economy depending on its form: asset-financed or cash. We then illustrate how a short-term increase in access to loans leads to very distinct behavior in the short run. The relevance of the model can be evaluated using a field experiment, which we are currently implementing in Uganda.Citation
Kaboski, Joseph P., Molly Lipscomb, and Virgiliu Midrigan. 2014. "The Aggregate Impact of Household Saving and Borrowing Constraints: Designing a Field Experiment in Uganda." American Economic Review, 104 (5): 171-76. DOI: 10.1257/aer.104.5.171Additional Materials
JEL Classification
- C93 Field Experiments
- D14 Household Saving; Personal Finance
- O12 Microeconomic Analyses of Economic Development
- O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance