This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. American Economic Review
  4. May 2014
  5. The Aggregate Impact of Household Saving and Borrowing Constraints: Designing a Field Experiment in Uganda

The Aggregate Impact of Household Saving and Borrowing Constraints: Designing a Field Experiment in Uganda

  • Joseph P. Kaboski
  • Molly Lipscomb
  • Virgiliu Midrigan
American Economic Review
vol. 104, no. 5, May 2014
(pp. 171-76)
Download Full Text PDF

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.104.5.171

Additional 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