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2B Development (Santangelo (The Market for Credit (L4&5) (The 5 core…

- - - - RCTs
      - Malaria Bednets
        
        Shared cost or free?
        
        Cohen & Dupas (2010)
        
        Entitlement or Learning Effect?
        
        Dupas (2014)
    - - Diff-in-Diff
      - pre-post
      - Balsaki Program & Diff-in-Diff
  - - - Banerjee et al. (2010) "The Miracle of Microfinance?"
        
        Microcredit nor miraculous. Only serious effect is from temptation goods to durables. Increase in investment for businesses that exist, mainly at upper end. New businesses are worse than control. Similar results in 5 other studies.
    - - +Extension to the Credit Market Model
        
        Monitoring costs are linear in what is borrowed
        
        Monitoring costs are linear in costs to user of defaulting
        
        Monitoring costs are fixed
    - - Yes ex-ante, but probably not ex-post
    - - Karlan and Zinman (2009): SA, randomise loans over 3 aspects. Find Hidden Information effect insignificant but moral hazard has significant effect
    - - Women Only
      - Weekly Repayment Schedule
        
        Field & Pande (2008)
      - Group Liability
        
        Karlan & Gine (2010)
      - Small intial loan which increases.
      - Weekly Meetings
        
        Field & Pande (2008) save as above. Karlan (2007)
  - - - Ex-Ante Strategies
        
        Consumption Side
        
        Accumulate Savings/Assets
        
        Buy Insurance
        
        Production Side
        
        Invest to reduce exposure
        
        Diversify
        
        across occupations or plots/crops
        
        symmetric shocks across occupations likely in small economy
        
        Location
        
        Choose land contracts that reduce exposure to risk (sharecropping > fixed rent)
        
        Avoid risky investments even if they are more profitable. Weather Index Insurance
        
        Rosenzweigh and Binswanger (1993)
        
        reduction in weather risk would result in more investments which would raise profits
        
        poor farmers don't invest to avoid risk so make less money. Hence they are poor because they are poor when there is no insurance.
        
        Karlan and Udry (2014)
        
        Insurance Model
        
        See 4 possible states of the market: Perfect, imperfect credit, imperfect insurance, imperfect both.
        
        Gave Credit and Insurance Grant at random (2x2 randomisation) Finds insurance grants have significant positive effect on investments. Farmers seem to be able to produce the credit once they have the insurance
        
        When offered actuarially fair insurance in future years, around 1/2 of farmers took it up
        
        Take Up Very Low
        
        Price
        
        Financial Literacy
        
        Behavioural Explanations
        
        Credit Constraints
        
        Basis Risk
        
        Risk associated with the farmer suffering the loss but the insurance doesn't pay out.
        
        Alternative Risk-Coping Strategies
      - Ex-Post Strategies
        
        Resort to Credit
        
        Obtain transfer from government
        
        v. rare. Gov will only tend to intervene when shock is to a large area
        
        Obtain transfer from social network
        
        Sell assets
        
        Paxson (1992) People do Dissave out of transitory income shocks. Thailand. But EV probl cause Thailand financially developed
        
        Not making productive investments
        
        Bullock Selling
        
        Rosenzweigh and Wolpin (1993)
        
        Kazianga and Udry (2006)
        
        Underinvestment in Education & Health of Children
        
        Jensen (2000)
        
        Adverse shocks -> less visits to doctor when ill, more malnourishment, less enrolment at school
        
        Increase supply of labour
        
        general equilibrium effects may result in negative consequences
  - - - The Diference between Exponential and Hyperbolic Discounting
      - Ashraf et al. (2006)
      - Maths model of Hyperbolic discouting
    - - Saving through credit or negative interest rate bank accounts
      - ROSCAs
      - Dupas & Robinson (2013): Giving people savings accounts increases investments & consumption of women
  - - - Duflo, Kremer & Robinson (2008)
      - Duflo, Kremer and Robinson (2011)
        
        Two seasons worth of randomisation
        
        SAFI in earlier period with ex-ante choice of date of delivery is better than later offer with free delivery and large discount.
        Therefore, fertiliser providers should sell vouchers early on rather than with larger discounts later on.
    - - The Maths
      - Social Learning has two effects on technology adoption
        
        Spillover
        
        Free-Riding
    - - Econometric Problems
        
        2 ways to get identification
        
        Experiment
        
        Identify different groups whom the common shock and the social learning effect
      - Conley and Udry (2010)
        
        There is social learning.
        
        there is more social learning from people similar to yourself
        
        there is more social learning when you are a novice rather than a veteran
    - - Jensen (2007). The introduction of mobile phones
  - - - Goldstein and Udry (2008). Land Rights and Agricultural investment in Ghana
    - - Field (2007). On Peru
  - - - Jayachandran (2006)
        
        How wage elasticity changes with...
        
        3 factors affecting elasticity of wage to productivity
        
        Ability to smooth consumption inter-temporally
        
        Migration
        
        wage elasticity is increasing in migration costs
        
        landless have a higher propensity to move than landowners
        
        the wage elasticity is decreasing in the proportion of individuals who are landless
        
        Poverty
        
        2 Channels
        
        Intensive Margin: How individuals who remain change their hours
        
        Extensive Margin: Some people leave, reducing the no. of people left in the labour force.
        
        Use IV Approach. Wages depend on yield (production per acre) which depends on rainfall. Use rainfall as IV for yield and see if yield determines wages.
  - - - Credit
      - Managerial Capital and Training
      - Contract Incompleteness and Reputation
- - - - The Credit Market
      - The Labour Market
    - - Insurance
        
        Risk & Risk-Sharing
        
        Townsend Test Paper of the Perfect Insurance Model
        
        Mechanisms for Consumption Smoothing
        
        Limits to Insurance
        
        Information & Enforcement
        
        Implementing a Second-Best Scheme
      - Trading Networks
        
        Grief (1993) Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition
        
        The Model
        
        Multilateral Punishment Strategy
      - Labour Networks
        
        Munshi (2003) Networks in the Modern Economy: Mexican Migrants in the US Labour Market
  - - - Bandiera et al. (2005) Social Preferences and Response to Incentives: Evidence from Personnel Data.
    - - Banerjee & Munshi (2004) Hos Efficiently is Capital Allocated? Evidence from the Knitted Garment Industry in Tirupur