"Learning from Weather Forecasts and Adaptation among Cotton Farmers in Pakistan," with Davide Viviano. [Job Market Paper - Draft coming soon]
Abstract: Agricultural production is inherently risky and subject to weather shocks that threaten livelihoods for small-scale farmers worldwide. Short-range weather forecasts can help farmers plan immediate agricultural activities and take preventative measures that lower the likelihood of losses due to unforeseen weather. Advisory services coupled with weather forecasts can speed up learning about how forecasted weather patterns can affect crop production. We tested an optimal design strategy to detect treatment and spillover effects in a phone-based advisory service that reaches 450,000 cotton farmers in Pakistan. We developed a research design that accounts for both spillovers and adaptive assignments by assigning clusters to have variation in treatment intensity of the share of users per cluster assigned to any treatment. We find that treated farmers are attentive to forecasts by listening to more calls, recalling forecast information, and changing their farming activities to days with better weather. Short-run forecasts can provide meaningful information to help farmers increase input efficiency - especially for irrigation, fertilizer, and pesticide applications.
"Do Small Firms Partially Insure Customers from Price Increases? Evidence from Retail Firms in Tanzania" [Under Review]
STEG Working Paper Series Link
Abstract: Price variation is a typical feature of markets in developing countries. Rural firms face substantial price variation when purchasing goods (inputs) that they re-sell as outputs. How much of this input variation passes through to prices for rural customers? Rural households rely on local businesses to purchase household food staples and other essential commodities. Yet, relatively little economic literature examines retail passthrough rates of these essential food staples to clarify how it affects local food security. I use a panel of input and output prices for 230 urban firms and 240 rural firms to evaluate passthrough from idiosyncratic input price shocks on key commodities sold through urban-to-rural supply chains. I find that rural firms smooth both negative and positive input price shocks more than urban firms. By exploring possible mechanisms, I find suggestive evidence that smaller community size is associated with lower output prices, suggesting that social ties may play a role. At the same time, competitive pressure matters as well - rural firms who face new entrants and have higher absolute number of competitors have higher passthrough rates, consistent with a competitive market framework.
Abstract: In the absence of insurance and credit markets, the effect of adverse environmental shocks on rural firms is ambiguous because drought shifts both demand and supply curves. I use spatial and temporal variation in the 2016-2017 drought in Kenya to characterize the direct and indirect effects of drought-induced food insecurity on local firm outcomes. Firms in areas directly affected by drought have lower sales, profits, and hire fewer workers than firms in non-drought areas. Firm entry also increases in drought areas compared to non-drought areas, consistent with prior evidence that farming households form new businesses as a coping strategy following shocks. Sub-sector analysis reveals substantial heterogeneity. Service firms fare better than retail firms. But examining retail sub-sectors shows that firms selling higher-value food products (meat/fish and fruits/vegetables) experience greater declines than staple grain sellers in markets directly affected by drought, while firms selling high-value foods increase sales in non-drought areas. This is consistent with consumers in drought regions decreasing consumption of non-necessities.
"Search Costs and Relational Contracting: The Impact of a Digital Phonebook on Small Firms in Tanzania" with Brian Dillon [New revision coming soon]
Abstract: Search frictions can be substantial in rural markets in developing countries and can raise the cost of learning market information. For small firms, search frictions interfere with learning about new suppliers in their upstream market, and raise the cost of meeting new customers in their downstream market. I experimentally investigate whether lowering upstream and downstream search costs for small firms in rural Tanzania improves firm outcomes and alters the incentive to engage in relational contracts with suppliers and customers. Using a randomized experiment of 507 small firms, I study the impact of a digital phonebook that lowers the cost of accessing new business and customer contacts. Participating firms are split into a control and treatment group with two variations: 1) a phonebook listing that is visible to upstream suppliers in urban areas, and 2) a phonebook listing that is visible to downstream customers in rural areas. I find that treated firms increase relational contracting with their suppliers and decrease it with their customers. Yet, there is no strong evidence that the number of new customers or suppliers increases. It suggests that being listed in the phonebook caused firms to update their valuation of relational contracts and respond by negotiating better terms with suppliers and customers.
Works in Progress
"Supply chain networks and diffusion of shocks in rural markets," with Daniel Putman. Data collection on-going. Funding support from PEDL. Research Summary.
"Tax Exposure and Digital Exchange at the Edges of the Formal Economy: Experimental Evidence from Tanzania." Data collection on-going. Funding support from IGC.
"Two-sided Sided Subsidies to Support Biofortified Crop Adoption in Guatemala." In collaboration with Semilla Nueva. Funding support from DIV.
"Brokering information flows in the provision of a technology: Intermediated social learning through on-demand irrigation in Uganda," with Michael Kremer, Vesall Nourani, and Anirudh Sankar. In collaboration with Agriworks.
"Search costs, mobile phones, and agricultural investment: a telephone directory intervention in Tanzania," with Jenny Aker, Richard Anderson, Brian Dillon, and Hosea Mpogole. Data collection complete.
"Input Adoption and Supplier Search: The Impact of a Market Information Service for Kenyan Farmers," with Georges Poquillon. In collaboration with Precision Development. Data collection complete.