International Food Policy Research Institute (IFPRI) and Ethiopian Development Research Institute (EDRI) in collaboration with Ethiopian Economics Association. Eleventh Conference on Ethiopian Economy, July 18-20, 2013
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Learning with Others - A Randomized Field Experiment on the Formation of Aspirations in Rural Ethiopia
1. 23/07/2013
Learning with Others - A Randomized Field
Experiment on the Formation of Aspirations in
Rural Ethiopia
Tanguy Bernard1, Stefan Dercon2, Kate Orkin2, and Alemayehu Seyoum Taffesse1
1International Food Policy Research Institute, 2 University of Oxford
July 18, 2013
Eleventh International Conference on the Ethiopian Economy
Ethiopian Economic Association
1
2. Motivation
Elements of the aspirations framework
Aspirations project
Field experiment – design and findings
Outline
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3. Conceptual – ‘opportunities’
Empirical – Why do the poor not ‘invest’?
Ethiopians and fatalism?
Focus 1 - ‘external circumstances’ and ‘opportunities’.
Low returns to investments;
Unexploited opportunities due to lack of information or
knowledge;
Social constraints;
Focus 2 - constraints associated with the manifested attributes of
decision makers
Identity issues: sense of self;
Psychological issues: impatience, commitment, and psychological
barriers
Aspirations failure perspective
Motivation – why aspirations
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4. 23/07/2013
Aspirations:
A desire or an ambition to achieve something
An aim and implied effort to reach it
A set of future-regarding preferences
Related concepts
Economics : Satisficing
Psychology : Self-efficacy, locus of control
Anthropology : Aspiration failures
Common elements
Goals and aspirations are important determinants of success;
Evolution through time in response to circumstances;
Role of social comparisons and learning from relevant others,
An individual-level yet culturally (collectively) determined attribute
towards exploration of individual-group symbiosis
Elements of the Aspirations Perspective
4
5. Elements of the Aspirations Perspective
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What are Aspirations?
Aspirations have two distinctive aspects:
• Future-oriented - are goals that can only be satisfied at
some future time (differ from immediate gratifications);
• Motivators - are goals individuals are willing, in
principle, to invest time, effort or money in to attain
(different from idle daydreams and wishes)
Note: the ‘willingness to invest’ is ‘potential’, or
‘conditional’
Aspirations and expectations – preference vs.
beliefs;
5
6. Elements of the Aspirations Perspective
Why are aspirations important/useful?
Aspirations (or the capacity to aspire):
Reflect bounded rationality;
Are socially determined (social interaction);
Are distributed unevenly within communities.
Condition individual behaviour and well-being
Useful device in analysing and/or addressing poverty
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7. Elements of the Aspirations Perspective
How do aspirations condition individual behaviour?
Aspiration window:
an individual’s cognitive world, his/her zone of ‘similar’, ‘attainable’
individuals;
Reflects the information and economic opportunities of the local
environment;
Multi-dimensional (‘similarity’);
Aspiration gap:
difference between the aspired ‘state’ and current ‘state’
Conditions future-oriented behaviour - inverted U relationship
between gap and effort
A possible outcome is an aspiration failure - lack of pro-active
behaviour (or ‘under-investment’) towards filling the aspiration
gap
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9. Elements of the Aspirations Perspective
Measurement Issues
• Aspirations are not directly observable
– Revealed by observed behaviour: interpretation issues (linking
aspirations and behaviour)
– Elicited using subjective questions: measurement issues
• Limits to subjective assessment:
– Subjects: subjects’ willingness to report private knowledge, evaluation
apprehension, and subject role playing
– Instruments (attributes of): order of questions (anchoring), the
number of categories on the rating scale (odd-even), the adjectives that
are used as the endpoints of the rating scale, and the adverbs that
describe scale categories.
(e.g. Delavande et al. (2009), Bertrand and Mullainathan (2001) for
reviews)
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10. Elements of the Aspirations Perspective
Identification issues
• individual characteristics affect aspirations, aspiration windows
and behaviour (e.g. schooling levels, wealth, and family
background),
Particularly the endogeneity of the aspiration window a key
hurdle
• aspirations ‘cause’ success – a person with higher aspirations
may be more successful.
• Success ‘causes’ aspirations – a successful person may revise
his/her aspiration to a higher level, or
experiment, panel data
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11. The “Aspirations” project
Step 1 – correlates of aspiration-related concepts
Step 2 – test and validate a measurement strategy
Step 3 – assess validity of the “aspiration window” hypothesis
An experiment
Exogenous shock to aspirations: Mini-documentaries of local
success stories screened to randomly selected individuals.
Placebo: local TV show.
3 rounds of data
• Baseline pre-treatment (Sept-Dec 2010)
• Aspirations retest immediately after treatment
• Follow-up (Mar-May 2011)
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12. Field Experiment - Aspirations Measures
200,000 ETB ~ value of
one harvest of chat from
one hectare
100,000 ETB ~ value of
one harvest of chat
from half a hectare
0 ETB
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13. Surveyed : Treatment, 6 households (12 individuals) in every village
Placebo, 6 households (12 individuals) in every village
Control, 6 households (12 individuals) in every village
Non-Surveyed : Treatment, 18 households (36 individuals)/ intense treatment
village
Placebo, 18 households (36 individuals)/ intense placebo village
Treatment village Placebo village
16 Screening sites, 4 villages/screening site (2 Intense Treatment, 2 Intense
Placebo),
36 households/village (18 households surveyed, 18 households not surveyed)
Field Experiment – Design
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15. Field Experiment – Basic Features
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All
villages
Intense-
treatment
villages
Intense-
placebo
villages
# villages 64 32 32
# individuals 1,942 1,011 931
of which:
Treatment individuals 610 324 303
Control individuals 625 343 311
Placebo individuals 620 344 317
Avg # peers invited to treatment 0.83 1.23 0.39
(std.dev) (0.92) (0.96) (0.63)
Avg # peers invited to placebo 0.77 0.38 1.20
(std.dev) (0.89) (0.61) (0.95)
16. Field Experiment – Baseline Correlates of Aspirations
Income
aspiration
Wealth
aspiration
Education
aspiration
Social status
aspiration
Aspiration
index
Age -0.000 0.001 0.002 0.006 0.003
(0.000) (0.002) (0.003) (0.003)** (0.001)**
Age² 0.000 -0.000 -0.000* -0.000* -0.000
(0.000) (0.000) (0.000) (0.000) (0.000)***
Gender (Male=1) 0.008 0.062 0.258 0.096 0.104
(0.002)*** (0.036)* (0.051)*** (0.049)** (0.021)***
Education (Read/write=1) -0.000 0.068 0.333 0.312 0.152
(0.002) (0.070) (0.051)*** (0.073)*** (0.027)***
R2 0.03 0.01 0.08 0.04 0.07
N 1,964 1,967 1,932 1,957 1,865
* p<0.1; ** p<0.05; *** p<0.01; Screening site fixed effects included but not reported; Robust standard errors in
parentheses
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17. Balance
Sample balanced on gender, literacy, age and most outcomes
* p<0.1; ** p<0.05; *** p<0.01
All
Treatment
(T)
Placebo
(P)
Control
(C)
% compliance by treatment status 95 93.8 96.2 100
Education
(Read/write
=1)
Gender
(% male)
Age
(complete
d years)
Baseline Standarized ---- Aspiration
Income Wealth
Children's
Education
Social
Status
Aggregate
Difference:
T-C, p-value
0.02 0.32 0 0.84 0.15 0.86 0.1 0.14 0.03 0.35 0.05 0.43 0.09 0.08* 0.04 0.12
Difference:
P-C, p-value
0.02 0.32 0 0.93 0.05 0.94 0 0.89 0.05 0.15 0.01 0.83 0.04 0.55 0.01 0.5
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18. Field Experiment - Compliance and Potency of Treatment
Treatment
(standard
error)
Placebo
(standard
error)
Difference
(p-value)
Liked a lot what I saw?
0.95 0.73 0.22
(0.02) (0.01) (0.00)***
Discussed it a lot with my neighbours
0.87 0.71 0.15
(0.01) (0.02) (0.00)***
Discussed it at least once with neighbours
over the past two weeks
0.32 0.21 0.11
(0.02) (0.02) (0.00)***
Content generated a lot of discussion
within community
0.92 0.72 0.20
(0.01) (0.02) (0.00)***
Assessment of Documentaries and Placebo
* p<0.1; ** p<0.05; *** p<0.01
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19. Field Experiment - Compliance and Potency of Treatment
How does his/her present condition
fares compared to yours today?
He/she is
worse off
We’re about
the same
He/she is
better off
How did his/her
initial condition
fared compared
to yours five years
ago?
He/she was worse off 9.35 1.40 40.19
We were about the same 4.83 2.49 12.15
He/she was better off 6.70 1.71 21.18
Table 5 – Relevance of documentaries
Cell proportions are reported. The totals of all cells add up to 100. N=642
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23. Treatment and Placebo Effects on Future-Oriented Behaviour
* p<0.1; ** p<0.05; *** p<0.01; Screening site fixed effects not reported; Robust standard errors in parenthesis
(1) (2) (3) (4)
Treatment
-3.33 -3.83
(12.61) (12.67)
Placebo
-8.46 -8.85
(16.91) (16.865)
# peers w/treatment
18.48 24.91
(7.97)** (10.6)**
# peers w/placebo
-9.63 -9.47
(8.49) (6.73)
Baseline time
allocation - Work
0.69 0.61 0.70 0.60
(0.02)*** (0.03)*** (0.02)*** (0.03)***
Constant
138.1 167.7 156.0 141.7
(79.4)* (81.8)** (87.2)* (74.9)*
R2
0.3 0.18 0.3 0.18
N 1,280 1,317 1,280 1,317
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Treatment effects on time allocation - work
24. Treatment and Placebo Effects on Future-Oriented Behaviour
* p<0.1; ** p<0.05; *** p<0.01; Screening site fixed effects not reported; Robust standard errors in parenthesis
(1) (2) (3) (4)
Treatment
19.97 19.84
(12.93) (13.04)
Placebo
26.39 26.83
(12.79)** (13.01)**
# peers w/treatment
-0.74 -10.87
(6.60) (6.28)*
# peers w/placebo
1.79 3.35
(6.52) (5.71)
Baseline time
allocation - Work
0.31 0.31 0.31 0.31
(0.03)*** (0.03)*** (0.03)*** (0.03)***
Constant
522.6 549.2 519.8 560.2
(34.2)*** (33.3)*** (34.9)*** (33.8)***
R2
0.07 0.07 0.07 0.07
N 1,284 1,322 1,284 1,322
23/07/2013 24
Treatment effects on time allocation - leisure
25. Treatment and Placebo Effects on Future-Oriented Behaviour
Savings Savings Deposits Deposits Withdrawals Withdrawals
(1) (2) (3) (4) (5) (6)
Treatment
186.9 63.5 33.7
(106.4)* (22.3)*** (17.2)*
Placebo
126.1 17.9 4.6
(95.1) (20.6) (9.3)
# peers with treatment
34.3 -37.1 -5.4
(85.9) (11.9)*** (6.7)
# peers with placebo
-28.2 -7.0 7.7
(46.9) (10.5) (6.2)
Baseline savings
0.741 0.658 -0.011 0.137 0.004 0.016
(0.578) (0.513) (0.011) (0.198) (0.017) (0.019)
Constant
-105.3 -24.9 80.9 24.1 55.2 32.7
(314.9) (271.4) (47.9)* (21.8) (108.1) (16.4)**
R2 0.16 0.29 0.05 0.04 0.03 0.02
N 1,258 1,288 1,258 1,288 1,258 1,288
* p<0.1; ** p<0.05; *** p<0.01; Screening site fixed effects and controls for age, age², gender and education not
reported; Robust standard errors in parenthesis
Table 10 – Treatment effects on savings behaviour
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26. Treatment and Placebo Effects on Future-Oriented Behaviour
Table A1 - Direct and indirect treatment effect on Locus of Control
LOC
others
LOC others LOC internal LOC
internal
LOC chance LOC
chance
Treatment
-0.027 0.083 -0.030
(0.051) (0.038)** (0.044)
Placebo -0.015 -0.027 -0.028
(0.050) (0.039) (0.043)
# peers w/treatment
-0.056 -0.016 -0.059
(0.028)** (0.020) (0.023)**
# peers w/placebo
-0.002 -0.018 0.023
(0.028) (0.023) (0.025)
Baseline LOC
0.196 0.212 0.089 0.098 0.166 0.144
(0.031)*** (0.030)*** (0.030)*** (0.030)*** (0.027)*** (0.025)***
Constant
1.720 1.736 2.726 2.684 1.900 1.911
(0.120)*** (0.127)*** (0.124)*** (0.123)*** (0.105)*** (0.104)***
R2 0.05 0.06 0.03 0.02 0.05 0.05
N 1,341 1,372 1,342 1,373 1,341 1,374
* p<0.1; ** p<0.05; *** p<0.01; Screening site fixed effects not reported; Robust standard errors in parenthesis
23/07/2013 26
27. Treatment and Placebo Effects on Future-Oriented Behaviour
Table A2 - Direct and indirect treatment effect on Perception of Poverty
* p<0.1; ** p<0.05; *** p<0.01; Screening site fixed effects not reported; Robust standard errors in parenthesis
Poverty due to Fate Poverty Structural Poverty Individual
Treatment
-0.108 0.033 0.088
(0.048)** (0.038) (0.042)**
Placebo
-0.005 0.058 0.072
(0.048) (0.037) (0.042)*
# peers
w/treatment
-0.048 -0.046 -0.011
(0.027)* (0.021)** (0.024)
# peers
w/placebo
0.008 -0.012 -0.005
(0.029) (0.023) (0.025)
Baseline
percept poverty
0.060 0.028 0.111 0.052 0.058 0.083
(0.031)* (0.031) (0.033)*** (0.030) (0.032)* (0.030)***
Constant
2.397 2.506 2.465 2.723 2.907 2.869
(0.116)*** (0.120)*** (0.120)*** (0.114)*** (0.124)*** (0.119)***
R2 0.02 0.02 0.02 0.03 0.03 0.03
N 1,339 1,368 1,337 1,368 1,339 1,370
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28. Observations
"Weak" treatment, but:
Documentaries affected aspirations, expectations, time
allocation, savings behaviour, and perceptions more than
the placebo even 6 months after treatment;
Direct and, even more visible, indirect (group) effects are
detected – more of an aspiration window story rather
than a role model one;
It is not obvious why some effects are direct (savings)
while others are indirect (time allocation);
Further analysis;
Expanding coverage – Malawi, Pakistan via IFPRI;
23/07/2013 28
Notes de l'éditeur
Ethiopian households’ average expenditure pattern – stimulants vs. human capital - 2-4 times (HICE of 1995/96, 1999/2000, and 2004/05);FatalismGeneral - lack of proactive and systematic effort to better one’s own life (consistent with the language of the poor);Economic perspective - making the ‘investments to better one's life’.
For example, a person with a narrow aspiration gap with respect to wealth could be expected to have limited incentives to invest with the aim of increasing her wealth. Thus, low investment on the part of individuals provides an initial indicator of narrow aspiration gap.