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This study tests the effectiveness of behavioral-based disclosure formats. Around 1,700 individuals from Mexico and Peru chose among loans and savings accounts presented in different formats, including a simplified key facts statement (KFS) and current marketing brochures. The study finds that the price elasticity of loans is ?1.04 using brochures and ?3.19 using the simplified KFS, with smaller effects for savings products. Finally, while financial literacy is correlated with better decision-making, the effect of the disclosure format for loans is about three times as large as that of financial literacy. More importantly, the KFS helps financially illiterate individuals relatively more.
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Although the concept of randomized assignment to control for extraneous factors reaches back hundreds of years, the first empirical use appears to have been in an 1835 trial of homeopathic medicine. Throughout the 19th century, there was primarily a growing awareness of the need for careful comparison groups, albeit often without the realization that randomization could be a particularly clean method to achieve that goal. In the second and more crucial phase of this history, four separate but related disciplines introduced randomized control trials within a few years of one another in the 1920s: agricultural science, clinical medicine, educational psychology, and social policy (specifically political science). Randomized control trials brought more rigor to fields that were in the process of expanding their purviews and focusing more on causal relationships. In the third phase, the 1950s through the 1970s saw a surge of interest in more applied randomized experiments in economics and elsewhere, in the lab and especially in the field.
Field Experiment --- Lab Experiment --- Randomization --- RCT --- Selection Bias
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The extent to which teachers and school directors are held to account may play a central role in determining education outcomes, particularly in developing and transition countries where institutional deficiencies can distort incentives. This paper investigates the relationship between an expanded set of school inputs, including proxies for the functionality of "top-down" and "bottom-up" accountability systems, and education outputs in Albanian primary schools. The authors use data generated by an original survey of 180 nationally representative schools. The analysis shows a strong negative correlation between measures of top-down accountability and students' rates of grade repetition and failure in final examinations, and a strong positive correlation between measures of top-down accountability and students' excellence in math. Bottom-up accountability measures are correlated to various education outputs, although they tend lose statistical significance once parent characteristics, school resources and top-down accountability indicators are considered. An in-depth analysis of participatory accountability within the schools focuses on parents' willingness to hold teachers to account. Here, the survey data are combined with data from lab-type experiments conducted with parents and teachers in the schools. In general, the survey data highlight problems of limited parental involvement and lack of information about participatory accountability structures. The experiments indicate that the lack of parental participation in the school accountability system is owing to information constraints and weak institutions that allow parent class representatives to be appointed by teachers rather than elected by parents.
Accountability --- Communities & Human Settlements --- Education --- Education For All --- Governance --- Lab Experiment --- Primary Education --- Secondary Education --- Teaching and Learning --- Tertiary Education --- Albania
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The predictions of different classic migration theories are tested by using incentivized laboratory experiments to investigate how potential migrants decide between working in different destinations. First, the authors test theories of income maximization, migrant skill-selection, and multi-destination choice as they vary migration costs, liquidity constraints, risk, social benefits, and incomplete information. The standard income maximization model of migration with selection on observed and unobserved skills leads to a much higher migration rate and more negative skill-selection than is obtained when migration decisions take place under more realistic assumptions. Second, these lab experiments are used to investigate whether the independence of irrelevant alternatives assumption holds. The results show that it holds for most people when decisions just involve wages, costs, and liquidity constraints. However, once the risk of unemployment and incomplete information is added, independence of irrelevant alternatives no longer holds for about 20 percent of the sample.
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