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on Development |
| By: | Sarah A. Janzen; Michael R. Carter |
| Abstract: | When natural disasters afflict poor communities that lack buoyant access to financial markets, households face the unsavory choice of reducing consumption in order to protect remaining assets, or selling assets at low prices in order to maintain consumption and nutrition. Both choices are costly and damage future economic potential. Formal insurance markets would seem to offer large private and social returns in these circumstances. This paper studies a drought-induced insurance payout from a pilot project in Kenya to determine whether insurance protects households from asset and consumption destabilization. Average treatment effect estimates show that insurance significantly reduces both kinds of costly coping. A closer examination using threshold estimation methods reveals that insurance has different impacts for different kinds of households. Households with larger asset bases--those shown to be most likely to sell assets in order to cope with a shock--are 64 percentage points less likely to do so when insured. Households with fewer assets--those most likely to decrease food intake as a coping strategy--are 43 percentage points less likely to do so with insurance. These results suggest that insurance can have a large impact on both the productivity of the current generation and the human capital of the next. |
| JEL: | G22 O12 O16 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19702&r=dev |
| By: | Alem, Yonas (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | Unlike most studies of subjective well-being in developing countries, we use a fixed effects regression on three rounds of rich panel data to investigate the impact of relative standing on life satisfaction of respondents in urban Ethiopia. We find a consistently large negative impact of relative standing - both relative to others and to oneself over time - on subjective well-being. However, controlling for unobserved heterogeneity through a fixed effects model reduces the impact of the relative standing variables on subjective well-being by up to 24 percent and reduces the impact of economic status by about 40 percent. Our findings highlight the need to be cautious in interpreting parameter estimates from subjective well-being regressions based on cross-sectional data, as the impact of variables may not be disentangled from that of unobserved heterogeneity. |
| Keywords: | life satisfaction; urban Ethiopia; relative standing; fixed effects |
| JEL: | I30 I31 O12 |
| Date: | 2013–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0579&r=dev |
| By: | Laurin Janes |
| Abstract: | Using data from a randomized control trial in Sri Lanka, this paper explores whether cash and in-kind grants helped microenterprises approach the productivity level of SMEs. The paper first estimates production functions and subsequently treatment effects on TFP levels. Most significantly, more able and more risk-averse owners benefit from the larger in-kind grant. Also, the larger in-kind grants allowed for increases in productivity to the least productive firms. The paper then uses data from a representative sample of formal firms to put the TFP levels and treatment effects in the microenterprises into perspective. The results suggest that the least productive firms where able to catch up with the average microenterprise and formal SMEs, while a gap remains with large firms. This finding encourages a positive view of the potential for productivity growth in microenterprises. |
| Keywords: | Economic development, microenterprises, formal informal, total factor productivity, embodied technology |
| JEL: | L25 O12 O14 O17 O33 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2013-18&r=dev |
| By: | Yann Algan; Pierre Cahuc; Andrei Shleifer |
| Abstract: | We use several data sets to consider the effect of teaching practices on student beliefs, as well as on organization of firms and institutions. In student level data, teaching practices (such as teachers lecturing versus students working in groups) exert a substantial influence on student beliefs about cooperation both with each other and with teachers. In cross†country data, teaching practices shape both beliefs and institutional outcomes. The relationship between teaching practices and student test performance is nonlinear. The evidence supports the idea that progressive education promotes social capital. |
| URL: | http://d.repec.org/n?u=RePEc:qsh:wpaper:19523&r=dev |
| By: | Robert Allen |
| Abstract: | This paper compares historical poverty baskets to modern food security and poverty lines.� Changes in the historical baskets and indexing methods are proposed to bring historical studies into better alignment with modern measures as well as with historically based estimates of energy requirements.� In addition, it is argued that modern poverty measures could be improved by emulating the historical methods. |
| Keywords: | poverty measurement, poverty line, subsistence ratio, nutritional standards, food security |
| JEL: | I32 N30 O15 |
| Date: | 2013–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:685&r=dev |
| By: | Azevedo, Joao Pedro; Inchauste, Gabriela; Sanfelice, Viviane |
| Abstract: | Over the past decade, 12 of 14 Latin American countries have experienced a reduction in inequality. Based on a series of counterfactual simulations, the observed changes in inequality are decomposed in order to identify the main determinants of inequality. In contrast to methods that focus on aggregate summary statistics, the method adopted in this paper generates counterfactual distributions, so that the analysis can account for changes related to demographics, occupation, labor earnings and transfers, pensions, and other nonlabor income sources. The results show that for the majority of countries in the sample, the most important contributor to the observed decline in inequality has been the relatively strong growth in labor earnings at the bottom of the income distribution. In particular, most of the reduction in inequality can be attributed to an increase in earnings per hour for the bottom of the income distribution. The paper also contributes to the literature on inequality in Latin America by providing the Shapley-Shorrocks value of this decomposition. |
| Keywords: | Poverty Impact Evaluation,Inequality,Services&Transfers to Poor,Labor Policies,Emerging Markets |
| Date: | 2013–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6715&r=dev |
| By: | Ujjayant Chakravorty (Department of Economics, Tufts University); Martino Pelli (Département d'économique, Université de Sherbrooke); Beyza Ural Marchand (Department of Economics, University of Alberta) |
| Abstract: | This paper estimates the returns to household income due to improved access to electricity in rural India. We examine the effect of connecting a household to the grid and the quality of electricity, defined as hours of daily supply. The analysis is based on two rounds of a representative panel of more than 10,000 households. We use the district-level density of transmission cables as instrument for the electrification status of the household. We find that a grid connection increases non-agricultural incomes of rural households by about 9 percent during the study period (1994- 2005). However, a grid connection and a higher quality of electricity (in terms of fewer outages and more hours per day) increases non-agricultural incomes by about 28.6 percent in the same period. |
| Keywords: | Electricity Supply, Quality, India, Energy and Development, Infrastructure |
| JEL: | O12 O18 Q48 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:shr:wpaper:13-05&r=dev |
| By: | Panagariya, Arvind; Mukim, Megha |
| Abstract: | This paper offers a comprehensive analysis of poverty in India. It shows that no matter which of the two official poverty lines is used, poverty has declined steadily in all states and for all social and religious groups. Accelerated growth between fiscal years 2004-2005 and 2009-2010 led to an accelerated decline in poverty rates. Moreover, the decline in poverty rates during these years was sharper for the socially disadvantaged groups relative to upper caste groups, so that a narrowing of the gap in the poverty rates is observed between the two sets of social groups. The paper also provides a discussion of the recent controversies in India regarding the choice of poverty lines. |
| Keywords: | Rural Poverty Reduction,Regional Economic Development,Achieving Shared Growth,Urban Partnerships&Poverty |
| Date: | 2013–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6714&r=dev |