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We use a randomized controlled trial to study the effect of large income changes, through unconditional cash transfers, on the food share of expenditures and consumption of calories among poor households in rural Kenya. Our preferred estimate of the food elasticity following USD 709 transfers is 0.78 for expenditure, 0.60 for calories, and 1.29 for protein. Experimental elasticities are lower than cross-sectional estimates. These estimates are unaffected by spillovers or price changes at the village level: results are similar with vs. without an almost ideal demand system, and with a control group in treatment vs. control villages.
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This paper studies how targeted cash transfers to women affect their empowerment. We use a novel identification strategy to measure women's willingness to pay to receive cash transfers instead of their partner receiving it. We apply this among women living in poor households in urban Macedonia. We match experimental data with a unique policy intervention (CCT) in Macedonia offering poor households cash transfers conditional on having their children attending secondary school. The program randomized whether the transfer was offered to household heads or mothers at municipality level, providing us with an exogenous source of variation in (offered) transfers. We show that women who were offered the transfer reveal a lower willingness to pay, and we show that this is in line with theoretical predictions.
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Accumulating evidence indicates that environmental temperature substantially affects economic outcomes and violence, but the reasons for this linkage are only partially understood. While factors external to human beings (such as agricultural production) are known to respond adversely to high temperatures, extreme temperatures could also directly influence the internal mental processes governing decision-making. We study this by systematically evaluating the effect of thermal stress on multiple dimensions of economic decision-making, judgment, and destructive behavior with 2,000 participants in Kenya and the US who were randomly assigned to different temperatures in a laboratory. We find that heat significantly affects individuals' willingness to voluntarily destroy other participants' assets, with pronounced increases among those experiencing heightened political conflict in Kenya. We find that other major dimensions of economic decision making are largely unaffected by temperature.
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