Development Issues in South Asia
Saturday, Jan. 6, 2018 2:30 PM - 4:30 PM
- Chair: Shahe Emran, Columbia University
Habit Formation and Rational Addiction: A Field Experiment in Handwashing
AbstractRegular handwashing with soap is believed to have substantial impacts on child health in the developing world. Most handwashing campaigns have failed, however, to establish and maintain a regular practice of handwashing. Motivated by scholarship that suggests handwashing is habitual, we design, implement and analyze a randomized field experiment aimed to test the main predictions of the rational addiction model. To reliably measure handwashing, we develop and produce a novel soap dispenser, within which a time-stamped sensor is embedded. We randomize distribution of these soap dispensers as well as provision of monitoring (feedback reports) or monitoring and incentives for daily handwashing. Relative to a control arm in which households receive no dispenser, we find that all treatments generate substantial improvements in child health as measured by child weight and height. Our key test of rational addiction is implemented by informing a subset of households about a future boost in monitoring or incentives. We find that (1) both monitoring and incentives increase handwashing relative to receiving only a dispenser; (2) these effects persist after monitoring or incentives are removed; and (3) the anticipation of monitoring increases handwashing rates significantly, implying that individuals internalize the habitual nature of handwashing and accumulate habit stock accordingly. Our results are consistent with the key predictions of the rational addiction model, expanding its relevance to settings beyond what are usually considered `addictive' behaviors.
Salt of the Earth: Migration, Adaptation, and Soil Salinity in Coastal Bangladesh
AbstractLivelihoods are particularly susceptible to environmental risk in coastal areas, where climate change is not only altering weather patterns but also accelerating sea-level rise, leading to increased saline contamination of soils. Using nationally representative data from Bangladesh, we find that soil salinity has a significant impact on migration, with opposing effects for internal and international moves. The effects are driven, in part, by the adverse effects on crop production, though households offset these losses through diversification into aquaculture. However, salinity is found to have direct effects on migration even controlling for income losses, suggesting proactive efforts to mitigate climate risk.
The Real Effects of Electronic Wage Payments: Evidence From a Field Experiment in Bangladesh
AbstractThis paper studies the impact of electronic wage payments on savings, consumption, and the ability to cope with financial shocks. We work with two large garment factories in Bangladesh which, prior to our study, paid all wages in cash. Workers are randomly and individually assigned to either continue receiving their wages in cash, or begin receiving electronic wage payments through direct deposit into a bank or mobile account. We find that electronic wage payments lead to higher savings and an improved ability to smooth income shocks, but that these effects vary across different types of electronic wage payments.
- O1 - Economic Development
- Q5 - Environmental Economics