Empirical Research in Development Economics

Paper Session

Friday, Jan. 6, 2017 12:30 PM – 2:15 PM

Hyatt Regency Chicago, Comiskey
Hosted By: Association for Economic and Development Studies on Bangladesh
  • Chair: Farida Khan, University of Wisconsin-Parkside

Mitigating the Impact on Human Health of Groundwater Contamination with Arsenic in Bangladesh: Overcoming the Current Stagnation

Lex Van Geen
,
Columbia University
Kazi Matin Ahmed
,
University of Dhaka

Abstract

Widespread groundwater contamination with arsenic of natural origin in Bangladesh was recognized 15 years ago but over 40 million villagers remain exposed today. Over the same period, irrefutable evidence of the health impacts and economic costs of arsenic exposure has accumulated. Flanagan et al. (Bull. World Health Org. 90: 839–846, 2012) associate an arsenic-related mortality rate of 1 in every 18 adults over the next 20 years with US$13 billion in economic losses, to which Pitt et al. (NBER Working Paper No. 21741, 2015) add an estimated 9% reduction in household income associated with each exposed income earner across his or her lifetime. The first reason for continued exposure is that shallow wells continue to be installed by individual households, either as additional wells or to replace failed wells, and that these wells remain largely untested. Rural households have nowhere to turn if they install a new well and want to have it tested. The second reason is that a particularly effective form of mitigation, the installation of several hundred thousand deep community well, which are typically low in arsenic, has not been optimized at the national or at the local level. A reinvigorated mitigation effort should therefore start from a recognition at the national level of the need for (1) a permanent network of reliable arsenic testers responding to a request from any household owning a well, and (2) the installation of many more low-arsenic public wells, with their siting more strongly linked to need and public access. Field experiments involving development economists that compare different ways of meeting these objectives at scale are urgently needed.

Community Participation in Decision-Making: Evidence From an Experiment in Providing Safe Drinking Water in Bangladesh

Malgosia Madajewicz
,
Columbia University
Anna Tompsett
,
Stockholm University
Ahasan Habib
,
NGO Forum for Public Health

Abstract

Benefits of community involvement in providing the community’s own public services can be elusive despite the broad endorsement that the practice receives. This study contributes to understanding how re-allocating decision-making authority from the implementing agency to intended beneficiaries influences access to a service, in our case safe drinking water. The experiment randomly allocates villages in Bangladesh to a top down intervention and two different interventions that delegate decision-making, giving the treated communities the authority to determine outcomes. In one delegated intervention, the community organizes itself to make decisions (community participation). The second seeks to limit elite control by requiring that the community make all decisions in a meeting, which is subject to participation requirements, and that all decisions be unanimous (regulated community participation). All three interventions improve access to safe drinking water, but delegating decision making improves access relative to the top down approach only when the intervention controls the influence of elites. The regulated community approach increases access 67% more than do the other two approaches. The top down approach uses local information less effectively, and installs fewer sources than do the two participatory approaches. Under the community approach, elite control constrains access to safe water sources. The regulated community approach expands and diversifies the group of people who participate in decision-making relative to the other two approaches, and it results in bargaining that limits the influence of elites.

Auctioneers as Market Makers: Managing Momentum in Chittagong Tea Auctions

Fahad Khalil
,
University of Washington
Tanjim Hossain
,
University of Toronto
Matthew Shum
,
California Institute of Technology

Abstract

We characterize the impact of the auctioneer in a large market in the context of tea auctions in Chittagong, Bangladesh. Rather than naïvely applying agency logic, we argue that the auctioneer's behavior is better understood using the lens of market design. In a rapidly moving auction, with four lots of teas sold per minute, we find that there is positive externality on subsequent lots from raising the acceptable price for a lot. Hence, an auctioneer, who must prevent auction prices from collapsing, will attempt to withdraw teas that are not fetching high prices, incurring short run costs. Because the auctioneer needs to keep the sellers’ trust that he is taking the best actions for them, he implements such a withdrawal policy mainly with the tea produced by estates in which he has a stake. While these teas receive a high price when sold, they sell less frequently creating an overall positive impact on market prices. Thus, it is the auctioneer’s desire to appear non-opportunistic, rather than opportunism, which results in his differential treatment of tea from estates which are related and not related to him.

Flexible Microfinance Products to Cope with Shocks: Evidence from SafeSave

Carolina Laureti
,
CERMI and Université Libre de Bruxelles

Abstract

Shocks are usual in the poor lives. Evidence shows that the poor barely edge against shocks. This paper provides an analysis of the extend to which households use flexible microfinance products to cope with shocks. We examine a unique dataset released by SafeSave, a microfinance institution serving poor slum dwellers in Dhaka, Bangladesh. Using SafeSave administrative data on daily transactions and balances of more than 10,000 accounts over seven years, we find that saving and borrowing respond to both expected and unexpected shocks. Namely, we find that cash-ins, i.e. savings deposits and loan repayments, into SafeSave accounts are concentrated on the days following wage payments. In addition, savings balances drop, and outstanding loan balances raise during Muslim festivals. Finally, saving and borrowing respond to the general shutdown of activities during nationwide political strikes (hartals).
Discussant(s)
Achyuta Adhvaryu
,
University of Michigan
Judy Chevalier
,
Yale University
Yasuyuki Sawada
,
University of Tokyo
Teevrat Garg
,
University of California-San Diego
JEL Classifications
  • O1 - Economic Development