Found 11 article(s) for author 'Michael Kremer'

Using Randomized Controlled Trials to Estimate Long-Run Impacts in Development Economics

Using Randomized Controlled Trials to Estimate Long-Run Impacts in Development Economics. Michael Kremer, May 13, 2019, Paper, “We assess evidence from randomized controlled trials (RCTs) on long-run economic productivity and living standards in poor countries. We first document that several studies estimate large positive long-run impacts, but that relatively few existing RCTs have been evaluated over the long run. We next present evidence from a systematic survey of existing RCTs, with a focus on cash transfer and child health programs, and show that a meaningful subset can realistically be evaluated for long-run effects. We discuss ways to bridge the gap between the burgeoning number of development RCTs and the limited number that have been followed up to date, including through new panel (longitudinal) data; improved participant tracking methods; alternative research designs; and access to administrative, remote sensing, and cell phone data. We conclude that the rise of development economics RCTs since roughly 2000 provides a novel opportunity to generate high-quality evidence on the long-run drivers of living standards.Link

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Behavioral Development Economics

Behavioral Development Economics. Michael Kremer, Gautam Rao, December 4, 2018, Paper, “Behavioral development economics applies theories and ideas from psychology and behavioral economics to the study of questions in development economics. We begin by examining a central puzzle in development economics: the existence of high rates of return without correspondingly rapid growth (the “Euler equation puzzle”). We discuss the extent to which present bias and loss aversion can help resolve this puzzle. We next consider various topics in development, including preventive health, savings, insurance, technology adoption, labor markets, and firms. We discuss particular behavioral theories that can help explain some key facts in each literature and describe the existing empirical evidence.Link

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Using RCTs to Estimate Long-Run Impacts in Development Economics

Using RCTs to Estimate Long-Run Impacts in Development Economics. Michael Kremer, December 3, 2018, Paper, “We assess evidence from randomized control trials (RCTs) on long-run economic productivity and living standards in poor countries. We first document that several studies estimate large positive long-run impacts, but that relatively few existing RCTs have been evaluated over the long-run. We next present evidence from a systematic survey of existing RCTs, with a focus on cash transfer and child health programs, and show that a meaningful subset can realistically be evaluated for long-run effects. We discuss ways to bridge the gap between the burgeoning number of development RCTs and the limited number that have been followed up to date, including through new panel (longitudinal) data, improved participant tracking methods, alternative research designs, and access to administrative, remote sensing, and cell phone data. We conclude that the rise of development economics RCTs since roughly 2000 provides a novel opportunity to generate high-quality evidence on the long-run drivers of living standards.Link

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The Right Way for Companies to Publicize Their Social Responsibility Efforts

The Right Way for Companies to Publicize Their Social Responsibility Efforts. Michael Kremer, April 2, 2018, Opinion, ““Why don’t we get credit for all the good things we do?” the CEO of a major global corporation asked me recently. After all, the company has innovative and impactful programs to ensure safe working conditions; training programs to help low-wage workers in its supply chain increase their earnings; numerous environmental initiatives to reduce its use of water, energy, and raw materials; diversity and volunteering programs for employees; and a foundation that makes generous contributions both locally and globally. Yet no one seems to notice.Link

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Borrowing Requirements, Credit Access, and Adverse Selection: Evidence from Kenya

Borrowing Requirements, Credit Access, and Adverse Selection: Evidence from Kenya. Michael Kremer, July 18, 2016, Paper, “We examine the potential of asset-collateralized loans in low-income country credit markets. When a Kenyan dairy cooperative exogenously replaced high down payments and joint liability requirements with loans collateralized by the asset itself – a large water tank- loan take-up increased from 2.4% to 41.9%. In contrast, substituting joint liability requirements for deposit requirements had no impact on loan take up. There were no repossessions among farmers allowed to collateralize 75% of their loans, and a 0.7% repossession rate among those offered 96% asset collateralization. A Karlan-Zinman test based on waiving borrowing requirements ex post finds evidence of adverse selection with very low deposit requirements, but not of moral hazard.Link

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The New Role for the World Bank

The New Role for the World Bank. Michael Kremer, November 22, 2015, Paper. “The World Bank was founded to address what we would today call imperfections in international capital markets. Its founders thought that countries would borrow from the Bank temporarily, until they grew enough to borrow commercially (NAC 1946, p. 312; Black 1952). The Bank could arguably address capital market failures if private banks would not lend to truly creditworthy projects in developing countries out of fear that they would not be repaid.Link

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Targeting, Discretionary Funding, and the Provision of Local Public Goods: Evidence from Kenya

Targeting, Discretionary Funding, and the Provision of Local Public Goods: Evidence from Kenya. Michael Kremer, Ryan Sheely, July 22, 2015, Paper, “We provide evidence about how politicians value targeting and discretionary funding by conducting an incentive‐compatible discrete choice experiment with 179 local‐level elected officials in rural Kenya. In the experiment, local politicians choose between different public goods packages that vary with respect to how the location of the good is decided and who controls the funding associated with maintaining the public good. We use an NGO water project as an opportunity to link… ” Link

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Dynamic Loss Aversion, Growth, and Development

Dynamic Loss Aversion, Growth, and Development, Michael Kremer, October 2014,Paper, We build a prospect-theoretic model to explain several stylized facts in the development literature. Agents get reference-dependent utility from the income generated by their assets, and are more a ected by losses than by gains. Such agents may underinvest in novel or risky assets, leading to unexploited opportunities for high marginal returns, while simultaneously maintaining high holdings of low-return assets that they have owned in the past. There is a range of possible steady-state asset allocations, depending on past ownership, in contrast to conventional models of poverty traps. The provision of insurance against catastrophic loss will have a larger e ect in motivating such agents to invest than it would on agents with classical preferences. We show how credit contract design can partially mitigate under-investment while simultaneouslyencouraging repayment of loans. Link

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Rates of Return, Optimization Failures, and Loss Aversion: Evidence from Kenyan Retail Shops

Rates of Return, Optimization Failures, and Loss Aversion: Evidence from Kenyan Retail Shops. Michael Kremer, September 1, 2014, Paper. “Using administrative data on whether Kenyan retailers take advantage of quantity discounts from wholesalers and survey data on lost sales due to stockouts, we estimate lower bounds of two particular forms of inventory investment for many Kenyan shops. We then confirm that inventories are strongly associated with self-reported profits across shops, and that shopkeepers report substantial losses from inadequate inventories…” Link

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