About: BREAD Fellows and Affiliates often submit Working Papers to be listed on the BREAD website. You can view BREAD Working Papers below. Repository: BREAD Working Papers are hosted in a Github repository (linked here) to ensure files are accessible freely and publicly.
Instructions for submitters: If you are a BREAD Fellow or Affiliate looking to submit a working paper, please submit it to ibread@princeton.edu and include the following: (1) Title, (2) Abstract, (3) Authors, and (4) Live link / Pdf that you want included on the website. Submissions must include all four to be accepted.
Abstract: Using data from an 18-month randomized trial, we estimate large and sustained impacts on water purification and child health of a program providing monthly coupons for free water treatment solution (diluted chlorine) to households with young children. The program is more effective and much more cost-effective than asking Community Health Workers (CHWs) to distribute free chlorine to households during routine monthly visits. That is because only 40% of households make use of free chlorine, targeting through CHWs is worse than self-targeting through coupon redemption, and water treatment promotion by CHWs does not increase chlorine use among free chlorine beneficiaries. Non-use of free chlorine is driven by households who have a protected water source and those who report that chlorine makes water taste bad.
Abstract: Public schooling systems are an essential feature of modern states. These systems often developed at the expense of religious schools, which undertook the bulk of education historically and still cater to large student populations worldwide. This paper examines how Indonesia’s long-standing Islamic school system responded to the construction of 61,000 public elementary schools in the mid-1970s. The policy was designed in part to foster nation building and to curb religious influence in society. We are the first to study the market response to these ideological objectives. Using novel data on Islamic school construction and curriculum, we identify both short-run effects on exposed cohorts as well as dynamic, long-run effects on education markets. While primary enrollment shifted towards state schools, religious education increased on net as Islamic secondary schools absorbed the increased demand for continued education. The Islamic sector not only entered new markets to compete with the state but also increased religious curriculum at newly created schools. Our results suggest that the Islamic sector response increased religiosity at the expense of a secular national identity. Overall, this ideological competition in education undermined the nation-building impacts of mass schooling.
Abstract: Skewed sex ratios often result from episodes of conflict, disease, and migration. Their persistent impacts over a century later, and especially in less-developed regions, remain less understood. The War of the Triple Alliance (1864–1870) in South America killed up to 70% of the Paraguayan male population. According to Paraguayan national lore, the skewed sex ratios resulting from the conflict are the cause of present-day low marriage rates and high rates of out-of-wedlock births. We collate historical and modern data to test this conventional wisdom in the short, medium, and long run. We examine both cross-border and within-country variation in child-rearing, education, labor force participation, and gender norms in Paraguay over a 150 year period. We find that more skewed post-war sex ratios are associated with higher out-of-wedlock births, more female-headed households, better female educational outcomes, higher female labor force participation, and more gender-equal gender norms. The impacts of the war persist into the present, and are seemingly unaffected by variation in economic openness or ties to indigenous culture.
Abstract: We examine a determinant of cultural persistence that has emerged from a class of models in evolutionary anthropology: the similarity of the environment across generations. Within these models, when the environment is more similar across generations, the traits that have evolved up to the previous generation are more likely to be optimal for the current generation. In equilibrium, a greater value is placed on tradition and there is greater cultural persistence. We test this hypothesis by measuring the variability of different climatic measures across 20-year generations from 500–1900. Employing a variety of tests that use a range of samples and empirical strategies, we find that populations with ancestors who lived in environments with more cross-generational instability place less importance in maintaining tradition today and exhibit less cultural persistence.
Abstract: Most economists would agree that the positive externalities caused by prevention of infectious disease create a prima facie case for subsidies. However, little is known about the appropriate magnitude of these subsidies, or about whether the level of such subsidies should vary across diseases. We integrate a standard epidemiological model with an economic model of consumer and producer behavior to address these questions. Across a continuum of market structures, we find that the equilibrium steady-state marginal externality is non-monotonic in disease transmissibility, peaking when the disease is just transmissible enough to survive in steady-state. This pattern implies that marginal externalities—and, as we show, optimal subsidies—are higher for serious but rare diseases relative to diseases with lower individual burden but higher disease prevalence. Crude calibrations suggest that optimal subsidies for technologies such as vaccines, condoms, and mosquito nets, which prevent infectious diseases, may be very large relative to current levels.
Abstract: We exploit variation in the composition of local fish catches around the time of birth using large- scale administrative and census data on adult cognitive test scores, schooling attainment, and occupation among coastal populations in Colombia to estimate the distinct causal effects of methylmercury (MeHg) and DHA, elements contained in fish, on cognitive development. Using an IV strategy based on an equilibrium model of fish supply that exploits time-series variation in oceanic SST anomalies on both coasts of Colombia from 1950 to 2014 as instruments, we find that net of cohort and municipality fixed effects increases in high-MeHg fish catches around a cohort’s birth, net of rainfall variation in the same interval, negatively affect the cohort’s verbal and math test scores upon exiting high school and their likelihood of continuing their schooling, while increasing the likelihood the cohort is disproportionally represented in manual-labor occupations. In contrast, for given levels of early-life high-MeHg fish supply, increases in early-life catch sizes of low-MeHg fish raise verbal and math test scores and educational attainment and lower the likelihood of being a manual laborer.
Abstract: Participatory development is designed to mitigate problems of political bias in pre-existing local government but also interacts with it in complex ways. Using a five-year randomized controlled study in 97 clusters of villages (194 villages) in Ghana, we analyze the effects of a major participatory development program on participation in, leadership of and investment by pre- existing political institutions, and on households’ overall socioeconomic well-being. Applying theoretical insights on political participation and redistributive politics, we consider the possibility of both cross-institutional mobilization and displacement, and heterogeneous effects by partisanship. We find the government and its political supporters acted with high expectations for the participatory approach: treatment led to increased participation in local governance and reallocation of resources. But the results did not meet expectations, resulting in a worsening of socioeconomic wellbeing in treatment versus control villages for government supporters. This demonstrates international aid’s complex distributional consequences.
Abstract: This article reviews the recent literature in economics on small-scale entrepreneurship (“microentrepreneurship”) in low-income countries. Major themes in the literature include the determinants and consequences of joining the formal sector, the impacts of access to credit and other financial services, the impacts of business training, barriers to hiring, and the distinction between self-employment by necessity and self-employment as a calling. The article devotes special attention to unique issues that arise with female entrepreneurship.
Abstract: We compare two different methods of appointing a local commission agent as an intermediary for a credit program. In the Trader-Agent Intermediated Lending Scheme (TRAIL), the agent was a randomly selected established private trader, while in the Gram Panchayat-Agent Intermediated-Lending Scheme (GRAIL), he was randomly chosen from nominations by the elected village council. More TRAIL loans were taken up, but repayment rates were similar, and TRAIL loans had larger average impacts on borrowers’ farm incomes. The majority of this difference in impacts is due to differences in treatment effects conditional on farmer productivity, rather than differences in borrower selection patterns. The findings can be explained by a model where TRAIL agents increased their middleman profits by helping more able treated borrowers reduce their unit costs and increase output. In contrast, for political reasons GRAIL agents monitored the less able treated borrowers and reduced their default risk.
Abstract: Using the 1918 Spanish influenza pandemic, Almond (2006) concludes that in utero exposure to maternal health insults has a large, negative impact on socio-economic status that reaches well into adulthood. A key assumption underlying this research is that birth cohorts exposed in utero to the influenza are statistically exchangeable with surrounding birth cohorts. The validity of that assumption is investigated using data from the 1920 and 1930 U.S. Censuses. We document that the exposed cohorts were born to families of lower socio-economic status relative to those who were not exposed. For example, fathers of the 1919 birth cohort were less likely to be literate, worked in lower-earning occupations, had lower socioeconomic status, were older, less likely to be white, had higher fertility and were less likely to be WWI veterans than the fathers of surrounding birth cohorts. Furthermore, after controlling for background characteristics, there is little evidence that individuals born in 1919 have worse socio-economic outcomes in adulthood relative to surrounding birth cohorts.
Abstract: We extend standard models of price pass-through in an imperfectly competitive supply chain to incorporate rationing of trade credit. Credit rationing reverses predictions concerning effects of raw material import prices on pass-through to wholesale prices, and effects of regulations of intermediaries. To test these we study the effects of a policy in Bangladesh’s edible oils supply chain during 2011-12 banning a layer of financing intermediaries. Evidence from a difference-in-difference estimation rejects the standard model. We find that the regulatory effort to reduce market power of financing intermediaries ended up raising consumer prices by restricting access to credit of downstream traders.
Abstract: We use data from polling stations and public primary schools to estimate the electoral effects of making school quality information available to voters. We exploit the introduction of a school-level accountability system in Brazil that provides, for the first time, information about school quality and exploit variation in schools affected by the policy. We find that incumbent vote shares are 2.14 percentage points higher for schools in the top 20% of our sample’s distribution of school quality and 1.54 percentage points lower for schools in the bottom 20% of the distribution. These effects are mostly driven by the unpredicted component of school quality and are larger for more educated voters.
Abstract: This paper analyzes the potential for competition policy to affect welfare and investment in a network industry. When a network is split between competitors, each internalizes less network effects, but may still invest to steal customers. I structurally estimate the utility of adopting a mobile phone from subsequent usage, using transaction data from nearly the entire Rwandan network. I simulate the equilibrium choices of consumers and network operators. Adding a competitor earlier could have reduced prices and increased incentives to invest in rural towers, increasing welfare by the equivalent of 1% of GDP.
Abstract: In many countries of the world the co-residence of young adults aged 25-34 with their parents is not uncommon and in some countries the savings rates of these age groups exceed those of the middle-aged contrary to the standard model of life-cycle savings. In this paper we examine the role of housing prices in affecting the living arrangements of adult family members and their individual savings rates by age. Using unique data from China that enable the re-construction of whole families and identify individual savings regardless of who within the family co-resides in the same household, and exploiting the Chinese government rules determining the supply of land for residential housing, we find that increases in housing prices significantly increase inter-generational co-residence and elevate the savings rates of the young relative to the middle-aged, conditional on income, in part due to the subsidies to the young from sharing housing with parents. Based on our estimates of the effects of housing prices on co-residence and the effects of co-residence on individual savings, we find that the savings rates of the young in China would be 21% lower if housing prices were at the same ratio to disposable incomes as that observed in the United States.
Abstract: This paper examines policy effectiveness as a function of leader identity. We experimentally vary leader religious identity in a coordination game implemented in India, and focus upon citizen reactions to leader identity, controlling for leader actions. We find that minority leaders improve coordination, while majority leaders do not. Alternative treatment arms reveal that affirmative action for minorities reverses this result, while intergroup contact improves coordination irrespective of leader identity. Both policies are less effective in minority-led groups in towns with a conflict history. Our results demonstrate that leader and policy effectiveness depend upon citizen reactions, conditioned by group identity and past conflict.
Abstract: This paper attempts to understand demand for local and other nostalgic production in food. In U.S. household scanner data, nostalgically produced foods sell for a large premium. Controlling for income and demographics, experts who work in food production and health are no less likely to purchase nostalgic milk and eggs, but are less likely to purchase local eggs in regions where eggs are produced at scale. In a choice experiment, willingness to pay for local tomatoes decreases when quality is shown. A simple theory explains this puzzling demand. When goods have too many dimensions of quality to communicate in market exchange (the USDA records over 70 for milk), innovation has ambiguous effects, consumers seek nostalgic signals of quality, and straightforward policies can backfire.
Abstract: We test the effectiveness of an entertainment education TV series, MTV Shuga, aimed at providing information and changing attitudes and behaviors related to HIV/AIDS. Using a simple model we show that “edutainment” can work through an ‘individual’ or a ‘social’ channel. We conducted a randomized controlled trial in urban Nigeria where young viewers were exposed to MTV Shuga or to a placebo TV series. Among those exposed to MTV Shuga, we created additional variation in the ‘social messages’ they received and in the people with whom they watched the show. We find significant improvements in knowledge and attitudes towards HIV and risky sexual behavior. Treated subjects are twice as likely to get tested for HIV eight months after the intervention. We also find reductions in STDs among women. These effects are stronger for viewers who report being more involved with the narrative, consistent with the psychological underpinnings of “edutainment”. Our experimental manipulations of the social norm component did not produce significantly different results from the main treatment. The ‘individual’ effect of edutainment thus seems to have prevailed in the context of our study.
Abstract: The livelihoods of the majority of the world’s poor depend on agriculture. They face substantial risk from fluctuations in weather conditions. Better risk, credit and savings markets can improve productivity and welfare in rural areas but entail high administrative costs. We consider a classic public good with benefits that theoretically exceed those of perfect insurance contracts ‐ improving the skill of long‐run weather forecasts. We use an equilibrium model of agricultural production and labor migration, and a variety of Indian panel datasets to assess quantitatively the effects of improvements in seasonal forecasts of monsoon weather. We find that in areas where the forecast is accurate (has “skill”) that investment, migration and rural wages respond to forecasts. We calculate that if such skill were pervasive across India, the total value of an accurate forecast for farmers and wage workers is in the tens of billions of rupees.
Abstract: Obesity is an important global health problem. Although obesity is not directly related to access to health care or constrained by resource deprivation, overweight status is predominantly found in poor, less-educated populations. This paper seeks to identify the causal role of schooling in affecting obesity among children and adolescents, using new estimation methods that exploit unique panel data on young twins in China. The estimates indicate that higher levels of schooling negatively affect being overweight and positively affect healthy behavior, with a large component of the causal effects due to increased information on the benefits of maintaining a healthy weight.