Working Papers

Divine Intervention? Religious Organizations and Public Service Delivery in India (with Kartikeya Batra)

(Job Market Paper)

(Draft) 

Coverage: The IndianEXPRESS

Abstract: Religion and state are deeply intertwined across societies. In settings with weak state capacity, religious institutions often emerge as influential actors, shaping social order and performing crucial societal functions. We analyze this interconnection in the context of decentralized religious institutions in Punjab, India, known as deras, and present evidence on their impact on the state’s provision of public services. Using a primary in-person census of 6,100 villages, we construct a geocoded dataset documenting village-level dera presence and link it with data on state-delivered public amenities. To address endogeneity, we employ an instrumental variable strategy, using the distance to historical religious leaders’ birth locations as an exogenous instrument for dera presence. Our findings show that relative to control villages, villages with deras had a nearly 40% increase in government services, driven primarily by health and education amenities, with notable effects at mid-levels of governance like state and district governments. Data from a survey of village council members across 671 villages suggests that deras engage with the state through informal financial arrangements to supplement government functions and by addressing information asymmetries. These findings demonstrate that religious organizations transcend their traditional roles; they actively supplement state capacity in service delivery. 

Work in Progress

The Debt Relief Project: Low Cost Access to Bankruptcy (with Stephanie Ben-Ishai, Zachary Irving, Sheisha Kulkarni, Jessica Montgomery) 

Abstract: By relieving individuals from crippling debt, bankruptcy has been shown to increase homeownership, annual earnings, employment, and promote the creation of new businesses. In addition to improving filers’ future financial outcomes, bankruptcy may also improve psychological wellbeing by relieving financial stress. However, despite the benefits that insolvency offers, many low-income debtors lack access to bankruptcy due to costs, technological barriers, and stigma. We conduct, to our knowledge, the first Randomized Controlled Trial (RCT) to examine whether lowering the financial barriers to insolvency improves access to this important financial institution for low-income debtors. We will use our RCT to achieve three aims: 1) Estimate a demand curve for bankruptcy and use this curve to estimate the effects of bankruptcy reforms on economic welfare, 2) determine the effects of low-cost bankruptcy on long-term credit and financial outcomes, 3) test whether bankruptcy alleviates the psychological effects of poverty on mental health, life satisfaction, and moment-to-moment experience and happiness. In partnership with a licensed insolvency trustee (LIT) in Canada, we randomly subsidize potential filers with $1,000 toward bankruptcy or consumer proposal filing fees. A separate treatment arm will offer debtors a surprise subsidy after they have decided to file so that we can separately identify income effects from the economic effect of lowering the financial barrier to access bankruptcy. We also use moment-to-moment experience sampling and sub-clinical questionnaires to track participants’ stream of consciousness and mental health throughout the filing process, to determine whether debt relief improves wellbeing by relieving financial stress.  

What Are the Benefits of Consumption Smoothing Around Payday? (with Menaka Hampole, Stephanie Ben-Ishai, Zachary Irving, Sheisha Kulkarni, Jessica Montgomery)

Abstract: Consumers often fail to smooth consumption across the pay-cycle. According to standard economic models, this should be harmful. Yet empirical estimates of these harms have focused on financial effects––e.g., overdraft fees and high-cost debt––that cluster around zero. We ask whether this is because the harms of lumpy consumption are psychological, rather than financial. Fallow periods before payday may cause stress, for example, even if individuals manage those periods through constrained consumption (e.g. skipping meals with friends) rather than high-cost debt. Such psychological outcomes are important for economics, since utility functions plausibly range over psychological outcomes such as stress. Furthermore, this work extends the broader literature on the psychological effects of economic scarcity. Whereas previous literature focuses on poverty, we will focus on a type of scarcity––lumpy consumption––that arises independently of economic status and may interact with poverty in interesting ways. Using experience sampling, we will measure how psychological outcomes like happiness, stress, temporal orientation, and thought patterns change around payday as a function of consumption smoothing, measured through transaction data and questionnaires.

Women’s Decision-making in Local Governance (with Diwakar Kishore)