Publications
The Psychology of Poverty: Where do we stand?
Social Philosophy and Policy (2023)
(with Johannes Haushofer)
Media coverage in VoxDevTalks
Short summary: In recent years, the psychological causes and consequences of poverty have received renewed attention from scientists and policymakers. In this review, we summarize new developments in this literature. First, we discuss advances in our understanding of the relationship between income and psychological well-being. There is a robust positive relationship between the two, both within and across countries, and in correlational and causal analyses. Second, we summarize recent work on the impact of “scarcity” and stress on economic preferences and decision-making. Our view of this literature is that the evidence is relatively weak. Third, we summarize evidence on the impact of psychological interventions on economic outcomes. Light-touch psychological interventions, such as videos that aim to raise aspirations, have shown some promise in encouraging investment and improving economic well-being. Similarly, psychotherapy and pharmacological mental health treatments have positive effects on economic outcomes. Relative to the effects of cash transfers, these impacts are small in absolute terms and large in per-dollar terms. We conclude by discussing whether a psychological poverty trap is plausible.
An information intervention in India reduces consumption of arsenic-contaminated drinking water and has small effects on health
PNAS Nexus (2026)
(with Shambhavi Priyam and Matthias Sutter)
Short summary: Contamination of drinking water with toxic arsenic affects more than 170 million people worldwide. Because arsenic is tasteless, colorless, and odorless when mixed with water, almost all people consume it unknowingly and suffer from health impairments (like skin-related diseases or cancer). Running a randomized controlled trial with 2,334 Indian households, we show that providing inexpensive information on how to reduce exposure to arsenic contamination in drinking water has significant effects even 1 year after the intervention. First, it generates knowledge about arsenic’s harmful effects. Second, it improves drinking water treatment practices. Third, treated households are between 2.7 and 9.3 percentage points more likely to consume safe drinking water. We also find suggestive evidence for improvements with respect to stomach-related health issues. With costs of <2 euros per disability-adjusted life year averted, our intervention is very cost-effective.
Work in Progress
One size fits all? The interplay of incentives, effort provision, and personality
R & R at Quantitative Economics
(with Zvonimir Bašić, Stefania Bortolotti, Stefan Schmidt, Sebastian O. Schneider and Matthias Sutter)
Short summary: Incentives are supposed to increase effort, yet individuals react differently to incentives. We examine this heterogeneity by investigating how personal characteristics, preferences, and socio-economic background relate to incentives and performance in a real effort task. We analyze the performance of 1,933 high-school students under a Fixed, Variable, or Tournament payment. Productivity and beliefs about relative performance, but hardly any personal characteristics, play a decisive role for performance when payment schemes are exogenously imposed. Only when given the choice to select the payment scheme, personality traits, economic preferences and socio-economic background matter. Algorithmic assignment of payment schemes could improve performance, earnings, and utility, as we show.
Impact of Financial Shocks on Decision Making: Experimental evidence from Kenya
[Pre-registration can be requested]
(with Matthias Sutter)
Short summary: We investigate the impact of financial shocks on economic decision-making among low-income individuals. Using a lab-in-the-field experiment with 1,917 factory workers in Nairobi, we manipulated poverty levels and financial shocks by varying monthly paydays and credit exposures. Our results reveal significant impacts on several dimensions of economic decision-making, including time preferences, higher order risk preferences, and competitiveness. These findings are further supported by a cluster analysis revealing distinct clusters of economic preferences among participants. Overall, this study highlights the importance of considering the impact of financial shocks in understanding economic decision-making in low-income populations facing persistent poverty.
How to Contain Arsenic-Contaminated Groundwater: An RCT in India and its effects on health
(with Matthias Sutter)
Short summary: We recruit a set of 3,700 households to identify effective interventions to contain arsenic-contaminated groundwater. We address hurdles such as lack of knowledge and limited resources in a 2x2 design. The first factor addresses information provision, by sending audio push-calls with information on arsenic contamination. The second factor address the questions of sufficient resources for taking action to avoid arsenic contamination. Here we distribute water filters with which arsenic contamination can be avoided altogether. Households are revisited eight weeks after the intervention to study effects on arsenic levels in the water. We measure take-up rates as well as health and productivity effects of this intervention.