Research
Working Papers
Can Informed Buyers Improve Goods Quality? Experimental Evidence From Crop Seeds, with A. Wambugu
Abstract: Hybrid seeds are an important technology for climate change adaptation. However, their quality is difficult for buyers to observe, an information friction that can impact the functioning of rural markets as an effective way to distribute seeds. In this paper, we first document that substandard seeds are common in rural Kenyan markets. We then study how increasing the number of informed buyers--who can discern product quality--affects market outcomes over time. To do so, we implement a market-level intervention, randomizing rural markets into a community-wide information campaign that trains farmers to identify quality-verified hybrid maize seeds. The intervention improved knowledge, affected seed purchases, and increased maize production. Impacts were heterogeneous—more educated farmers and areas with more substandard seeds benefited more. Meanwhile, sellers exited in response to treatment, but did not adjust prices or quality. These patterns can be explained by a simple model in which informed buyers can detect quality and switch sellers if needed to obtain higher quality. The presence of more informed buyers hurts profits of local sellers and can induce them to exit rather than offer higher quality if upgrading quality is too costly. The impacts on access to high quality seeds are far lower in this world relative to a world where firms are induced to upgrade quality. Taken together, the findings document new stylized facts and provide evidence relevant for boosting yields of a staple crop. More generally, they provide lessons on the role of improved consumer information in disciplining firms in low information environments.
Contracting structures in public procurement: Evidence from donor-funded electrification in Kenya, with C. Wolfram, E. Miguel, and S. Berkouwer
Economic Development & Institutions Blog
Economic Development & Institutions Policy Brief
Abstract: This paper studies the bundling and monitoring of the design, supply, and installation components of a major infrastructure project—Kenya’s nationwide electrification—in a high-stakes public procurement context using natural and experimental variation and granular, independently-collected construction quality data. Kenya’s utility administered dozens of donor-funded procurement contracts. Despite largely harmonized procedures, World Bank-funded contracts unbundled contract components—as ‘design-bid-build’—and enhanced monitoring compared to African Development Bank-funded contracts. This delayed construction progress but improved quality. Yet additional randomized inspections improve quality without large delays. A principal-agent framework illustrates how planner preferences affect the net benefits of each approach.
Can Mass Electrification (Still) Cause Structural Change, with Mitchell VanVuren. STEG Pathfinding Paper, February 2023.
Abstract: Despite its ubiquity in high income countries among households and in most industries, evidence is mixed for the socioeconomic impacts of electrification in low and middle income countries. Can mass electrification today still induce changes in productivity, labor allocation, and incomes which are associated with structural change, as it seems to have in the past? In this paper we discuss current evidence and directions for future research, with focus on (1) the role of electricity reliability, (2) identifying key investments that are complementary to electrification, and (3) selection, migration, and agglomeration effects when electrification is spatially uneven.
Published and Forthcoming Articles
Meta-Analysis and Public Policy: Reconciling the Evidence on Deworming, with K. Croke, J. Hamory, M. Kremer, R. Maertens, E. Miguel, and W. Wiecek. Proceedings of the National Academy of Sciences, 2024.
Abstract: The WHO recommends mass drug administration (MDA) for intestinal worm infections in areas with >20% infection prevalence. Recent Cochrane meta-analyses endorse treatment of infected individuals but recommend against MDA. We conducted a theory-agnostic random-effects meta-analysis of the effect of multiple-dose MDA and a cost-effectiveness analysis. We estimate significant effects of MDA on child weight (0.15 kg, 95% CI: 0.07, 0.24), mid-upper arm circumference (0.20 cm, 95% CI: 0.03, 0.37), and height (0.09 cm, 95% CI: 0.01, 0.16) when prevalence is over 20%, but not on Hb (0.06 g/dl, 95% CI: -0.01, 0.14). These results suggest that MDA is a cost-effective intervention, particularly in the settings where it is recommended by the WHO.
Money or Power? Choosing COVID-19 Aid in Kenya, with S. Berkouwer, P. Biscaye, O. Kim, K. Lee, E. Miguel, and C. Wolfram. Energy Economics, 2023.
International Growth Centre Blog
Private Enterprise Development in Low-Income Countries Research Note
Abstract: In response to the Covid-19 crisis, 186 countries implemented direct cash transfers to households, and 181 introduced in-kind programs that lowered the cost of utilities such as electricity, water, transport, and mobile money. During times of crisis, do people prefer in-kind transfers or cash, and why? In this paper, we compare electricity transfers against a benchmark of cash transfers (mobile money) among 2,000 rural and urban residents of Kenya with pre-paid electricity meter connections. We offer participants an incentivized choice between electricity transfers or mobile money, totaling approximately USD 10 to 15, and then implement their choice over three months. We generate three main findings. First, participants overwhelmingly prefer cash, with three-quarters of participants opting for mobile money even when offered electricity tokens with a cash value that is 40 percent higher, possible due to the flexibility in expenditures or credit constraints. Second, despite relatively low baseline electricity consumption, preference for cash is slightly lower in rural areas, possibly due to higher transaction costs for purchasing electricity, lower mobile money penetration, or savings constraints. Third, electricity tokens transfers generate a larger increase in electricity consumption than equivalent cash transfers, suggesting a role for mental accounting; however, we estimate no impact of either electricity or cash transfers on a broad set of socioeconomic outcomes. These patterns suggest that mobile money transfers generate larger welfare gains than electricity credit, at least in settings with high mobile money penetration.
Microfinance for clean cooking: what lessons can be learned for scaling up LPG adoption in Kenya through managed loans?, with N. Forougi, M. Gan, E. Muchiri, D. Pope, and E. Puzzolo. Energy Policy, 2021.
Abstract: Liquidity constraints are likely a key barrier to acquisition and sustained use of clean household energy in resource-poor settings. This study evaluates a pilot microfinance initiative in Kenya to help low-income rural households access liquefied petroleum gas (LPG) for cooking. Program beneficiaries received a six-month loan that covered all equipment costs and was to be repaid in monthly installments. We present results from surveys of beneficiaries (n=69) after they began using LPG, as well as 332 non-beneficiaries from the same community (to understand how beneficiaries and non-beneficiaries differ in cooking patterns and socioeconomic outcomes). 94% of beneficiaries had repaid their loan in full and on time at the time of data collection. Meanwhile, beneficiaries were more likely than non-beneficiaries to use LPG as their primary cooking fuel (76.8%) of beneficiaries versus 38.8% of non-beneficiaries). While 81.1% of beneficiaries who used LPG as their primary cooking fuel reported multiple fuel use, we find that beneficiaries increased LPG use by 5.9 hours per week with a corresponding decrease of 4.8 hours in weekly use of biomass fuel. Our findings suggest that promoting LPG usage through microloans for equipment is likely to be both commercially viable and beneficial to health through decreased use of polluting biomass fuel.
Is China Fudging its Figures?: Evidence from trading partner data, with J. Fernald and M. Spiegel. Journal of International Money and Finance, 2021.
Abstract: We use Chinese imports, measured as reported exports of trading partners, as a benchmark to gauge the accuracy of alternative Chinese indicators (including GDP) of fluctuations in economic activity. Externally-reported imports are likely to be relatively well-measured and free from domestic manipulation. Using principal components, we derive activity indices from a wide range of indicators. We choose a preferred index of eight non-GDP indicators based on their fit to Chinese imports, which we call the China Cyclical Activity Tracker (or C-CAT). We find that Chinese statistics have broadly become more reliable in measuring cyclical fluctuations over time. However, measured GDP has been excessively smooth since 2013, and adds little information relative to combinations of other indicators.
Should the WHO withdraw support for mass deworming?, with K. Croke, J.H. Hicks, M. Kremer, and E. Miguel. PLoS Neglected Tropical Diseases, 2017. (Editorial)
More Evidence on the Effects of Deworming: What Lessons Can We Learn?, with K. Croke and M. Kremer. American Journal of Tropical Medicine and Hygiene, 2017. (Editorial)
Work in Progress
Does Unreliable Electricity Hold Back Technology Adoption and Growth, with M. Mobarak, M. VanVuren, and A. Wambugu
Summary: Does unreliable electricity hold back economic growth by discouraging technology adoption? This project answers this question by estimating the effect of persistently poor electricity reliability. We leverage the presence of “feeder borders” in Nairobi, Kenya where different electricity service areas meet. Buildings along these borders can be physically adjacent, with only meters of separation, but “electrically distant”, experiencing very different levels of reliability. Using administrative data on the universe of feeder-level outages in Kenya, we identify over 200 borders that exhibit large, persistent differences in reliability. Comparing technology usage and economic outcomes for households and firms residing at these borders allows us to measure the causal impact of reliability differences.
[Data collection in progress]