Research Projects

Publications 

Gender and Willingness to Pay for Insured Loans: Empirical Evidence from Ghana (Journal of Development Studies)

(with Richard A. Gallenstein)

This study investigates the willingness to pay (WTP) for index-based drought insurance coupled with agricultural loans by product design and gender, using a contingent valuation method. The empirical estimations reveal several important findings. First, females have lower mean WTP than male farmers for each product design. Second, females do not express preference differences between insured loan product designs while males do. In fact, males prefer insured loans that make payouts directly to them and prefer insured loans without design risk.

Insured Loans and Credit Access: Evidence from a Randomized Field Experiment in Northern Ghana (American Journal of Agricultural Economics)

(with Richard A. Gallenstein, Mario J. Miranda, Abdoul G. Sam, Patricia Toledo, and Francis Mulangu)

We conducted a two‐treatment randomized control trial in northern Ghana to investigate how bundling index insurance with agricultural loans affects smallholder access to credit. In one treatment, farmer groups were invited to apply for production loans bundled with an index insurance contract that, in the event of a drought, indemnifies farmers directly (micro‐insured loans). In the second treatment, farmer groups were invited to apply for production loans bundled with an index insurance contract that, in the event of a drought, indemnifies the lender on the condition that the indemnity be used to retire the farmer's debt obligation (meso‐insured loans). Farmer groups in the control category were invited to apply for uninsured loans. We find that insured loans increase farmers' likelihood of receiving credit by between 15 and 21 percentage points. Exploring the mechanisms of this effect, we find no impact on the likelihood that farmers apply for credit but do find an increase in the likelihood of loan approvals of between 17 and 25 percentage points.

“Forest power: The impact of Community Forest Management on female empowerment” (Ecological Economics)

(with Corinne Bocci)

Community forest management (CFM) systems have been implemented in developing countries as forest conservation initiatives with community development objectives. Women are often active in CFM by participating in non-timber forest product harvesting and management. Given the increasing presence of women in CFM, this study assesses whether participating in community forest management gives females more household decision-making power, a proxy for empowerment. This is a relevant issue because many development policies are implemented with female empowerment objectives, yet no existing rigorous quantitative studies have examined whether women's participation in CFM empowers them. Using an ordered logistic regression and an instrumental variable method, we analyze a household-level survey of forest-dwelling residents living in the Maya Biosphere Reserve in northern Guatemala. We find that female's participation in CFM increases her intra-household bargaining power on average. The results demonstrate that CFM systems can have development benefits that extend beyond increased household income and welfare.. 

The COVID-19 Pandemic and Food Insecurity: A Viewpoint on India (World Development)

(with Jeevant Rampal)

In this article, we present our viewpoint on COVID-19 pandemic and one of the humanitarian challenges it will likely pose: food insecurity. We begin our article by presenting the status of hunger and food insecurity around the world, followed by that in lower and middle income countries, and in India. Then we discuss the COVID-19 lockdown and India’s current economic status, followed by India’s ranking in the 2019 Global Hunger Index (GHI) as well as hunger-related facts on Indian women and children. Then after, we discuss the damages to lives caused by COVID-19 and hunger with implications for food insecurity, nutritional status, productivity, education, and wage earnings (based on literature). More importantly, we discuss various complimentary steps to preventing COVID-19 related deaths with steps to preventing deaths related to food insecurity and hunger for the immediate, medium, and long terms. Finally, we provide a concluding paragraph highlighting the need for the Indian government to carefully combine governmental and non-governmental interventions, in reducing India’s food insecurity and hunger rates despite the COVID-19 related slowdown.

Gender and Dynamics of Agricultural Technology Adoption: Evidence from Uganda  (Agricultural Economics)

(With Abdoul G. Sam, Mario J. Miranda, and Gracious Diiro)

Technology adoption is seen as an important tool for increasing agricultural efficiency and combating food insecurity. Despite this theory, Sub-Saharan Africa, which suffers from one of the highest rates of food insecurity, has one of the lowest rates of technology adoption. This is especially prevalent among female headed households. Accordingly, the objective of this paper is to investigate the dynamics of technology adoption at household level and further disaggregate it by gender. Using four waves of Ugandan household level panel data, we find that technology adoption in the first period is the primary determinant of technology adoption in the subsequent periods. Gender level analysis shows that this finding is dominant by male headed households who make the majority of the sample. In contrast, lagged technology adoption is the main driver of adoption for female headed households.

Does Women’s Land Ownership Promote Their Empowerment? Empirical Evidence from Nepal (World Development)

(with Abdoul G. Sam)

Land rights equity is seen as an important tool for increasing empowerment and economic welfare for women in developing countries. Accordingly, the objective of this paper is to empirically examine the role of women’s land ownership, either alone or jointly, as a means of improving their intra-household bargaining power in the areas of own healthcare, major household purchases, and visiting family or relatives. Using the 2001 and 2011 Nepal Demographic and Health Surveys and relevant econometric techniques, we find that land ownership has a positive and significant impact on women’s empowerment. In particular, we find two important patterns of results. First, accounting for the endogeneity of land ownership with inverse probability weighting, coarsened exact matching and instrumental variable methods makes its impact on empowerment higher. Previous research in this area had largely ignored the potential endogeneity of land ownership. Second, the impact is generally stronger in 2011 than in 2001. As evidenced in a number of empirical studies, the increase in women’s bargaining power can in turn translate into a redirection of resources toward women’s preferences, including higher investment in human capital of the household such as education, health, and nutrition. Therefore, our study indicates that in places where agriculture is the main source of economy for women, policies enhancing land rights equity have the potential to increase women’s empowerment and associated beneficial welfare effects.

Link to presentation.

Willingness to Pay for Insured Loans in Northern Ghana (Journal of Agricultural Economics)

(With Richard Gallenstein, Abdoul G. Sam, and Mario J. Miranda)

Index insurance has been heralded as a potential solution to risk management problems faced by smallholder farmers in developing countries. Despite its potential, demand for standalone index insurance contracts has remained low in early field trials. We investigate the willingness to pay for drought index insurance‐backed loans in northern Ghana using contingent valuation. We find that index insurance lowers overall demand for agricultural loans. We also compare micro‐level index insurance, provided directly to farmers, with meso‐level insurance, provided to the credit agency and find that farmers appear to prefer micro‐level insurance. Finally, farmers are willing to pay to avoid basis risk.

The impact of index‐insured loans on credit market participation and risk‐taking (Agricultural Economics)

(with Richard Gallenstein, Jon Einar Flatnes, John Dougherty, and Abdoul G. Sam)

Index‐insured loans offer considerable advantages over standalone insurance policies for improving farmers’ access to agricultural credit. However, research on demand for such products and their impact on profitable investment decisions has been limited and conflicting. In this article, we investigate the impact of index insurance on demand for credit and investment decisions using a lab‐in‐the‐field experiment conducted in rural Tanzania. We find that index insurance increases demand for credit and high‐risk high‐return investments.

Impact of Index Insurance on Moral Hazard in the Agricultural Credit Market: Theory and Evidence from Ghana (Journal of African Economies)

(with John Dougherty and Richard Gallenstein)

Recent research suggests that coupling microfinance loans with an index insurance policy may be a cost-effective way to expand credit market access to smallholder farmers in developing countries. Index insurance can increase demand for credit and encourage increased supply of credit by protecting borrowers and lenders from covariate production shocks that discourage credit market expansion. In this paper, we propose that index insurance, when bundled with credit, may also reduce a different barrier to credit market access: high transaction costs caused by moral hazard in the credit market. We develop a theoretical model of a competitive credit market with moral hazard. In this market, lenders use either dynamic incentives or collateral to mitigate the moral hazard problem. The model shows that index insurance bundled with loan contracts can reduce moral hazard and increase borrower welfare. We then test the model and find some empirical support using a subset of data from a randomised control trial in northern Ghana.

Do Remittances Reshape Household Expenditures? Evidence from Nepal (World Development)

(with Olga Kondratjeva and Gerald Shively)

Lack of economic opportunities in their local communities push many individuals to migrate and send remittances to their families. Remittances can potentially influence household spending in sizeable ways, making it an important source of income. This article investigates the impact of remittances on various categories of household expenditure, including those for food, alcohol and tobacco, clothing, ceremonies, healthcare, education, home improvement, agriculture, and livestock. Using data from 5,987 households observed in the 2010/11 Nepal Living Standards Survey and applying an instrumental variable approach, we show that remittances are positively associated with expenditures on food and education. In contrast, we find a negative association between remittances and expenditures on alcohol and tobacco. We further disaggregate our analysis to investigate any differential impact of remittances by gender of the household head and find qualitatively similar results across both genders, suggesting that both male- and female-headed households generally tend to spend remittances in similar ways. Findings regarding household food consumption and education expenditures are generally consistent with previous research on remittances in Nepal, but expand our understanding by examining the impacts of remittances on expenditures on tobacco and alcohol, ceremony, agriculture, and livestock purchases. Through increased consumption of food and greater expenditures on education, remittances have implications for long-term investments in human capital, which can, in turn, increase labor productivity, wage earnings, and overall economic development.

Does bundling credit with index insurance boost agricultural technology adoption? Evidence from Ghana (Agricultural Economics)

 (with Richard A. Gallenstein, Abdoul G. Sam, Mario J. Miranda, Patricia Toledo, and Francis Mulangu)

The adoption of advanced agricultural technologies in Sub-Saharan Africa remains disappointingly low, particularly among the millions of poor smallholders who account for most of the agricultural production. We conducted a randomized control trial in Ghana to assess the impact of easing drought-risk constraints in the agricultural credit market, by bundling joint liability agricultural loans with index insurance, on smallholder farmers’ agricultural technology adoption decisions. In the micro-insurance treatment, any index insurance payouts go directly to farmers, while in the meso-insurance treatment, payouts are issued to banks to be used to expunge farmers’ debts. We find evidence that bundling joint liability lending with micro-insurance increases adoption of fertilizer.