nep-dev New Economics Papers
on Development
Issue of 2014‒10‒03
ten papers chosen by
Jacob A. Jordaan
Universitiet Utrecht

  1. Benefit in the wake of disaster: Long-run effects of earthquakes on welfare in rural Indonesia By Jérémie Gignoux; Marta Menéndez
  2. Why Do Households Forego High Returns from Technology Adoption - Evidence from Improved Cook Stoves in Burkina Faso By Gunther Bensch; Michael Grimm; Jörg Peters
  3. Who Are Poor and Do They Remain Poor? By Geoffrey M. Ducanes; Edita Abella Tan
  4. Self-Selection into Credit Markets: Evidence from Agriculture in Mali By Lori Beaman; Dean Karlan; Bram Thuysbaert; Christopher Udry
  5. The Effect of Informal Employment and Corruption on Income Levels in Brazil By Jamie Bologna
  6. Impact of Human Resource Development Training on Crop Damages by Wild Animals in Developing Countries: Experimental Evidence from Rural Pakistan By Kurosaki, Takashi; Khan, Hidayat Ullah
  7. The reduction of child mortality in the Middle East and North Africa : a success story By Iqbal, Farrukh; Kiendrebeogo, Youssouf
  8. The permanent input hypothesis : the case of textbooks and (no) student learning in Sierra Leone By Sabarwal, Shwetlena; Evans, David K.; Marshak, Anastasia
  9. Migration Experience, Aspirations and the Brain Drain - Theory and Empirical Evidence By Marcus H. Böhme; Toni Glaser
  10. Agricultural production, dietary diversity, and climate variability By Dillon, Andrew; McGee, Kevin; Oseni, Gbemisola

  1. By: Jérémie Gignoux (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Marta Menéndez (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, DIAL - Développement, institutions et analyses de long terme - Institut de recherche pour le développement [IRD], UP9 - Université Paris 9, Dauphine - Université Paris IX - Paris Dauphine)
    Abstract: We examine the long-term effects on individual economic outcomes of a set of earthquakes - numerous, large, but mostly not extreme - that occurred in rural Indonesia since 1985. Using longitudinal individual-level data from large-scale household surveys, together with precise measures of local ground tremors obtained from a US Geological Survey database, we identify the effects of earthquakes, exploiting the quasi-random spatial and temporal nature of their distribution. Affected individuals experience short-term economic losses but recover in the medium-run (after two to five years), and even exhibit income and welfare gains in the long term (six to 12 years). The stocks of productive assets, notably in farms, get reconstituted and public infrastructures are reconstructed with some improvements, seemingly partly through external aid, allowing productivity to recover. These findings tend to discount the presence of poverty traps, and exhibit the potential long-term benefits from post-disaster interventions in context where disasters primarily affect physical assets.
    Keywords: Natural disasters ; Earthquakes ; Rural Indonesia ; Long-term effects ; Welfare ; Aid and reconstruction
    Date: 2014–09
  2. By: Gunther Bensch; Michael Grimm; Jörg Peters
    Abstract: Around 3 billion people in developing countries rely on woodfuels for their daily cooking needs with profound negative implications for their workload, health, and budget as well as the environment. Improved cookstove (ICS) technologies in many cases appear to be an obvious solution. Despite continuous efforts of the international community to disseminate ICS, take up rates in most developing countries are strikingly low. In this paper, we examine the reasons for (non-)adoption of a very simple ICS in urban Burkina Faso. As a first result, we find that ICS users save between 20 and 30 percent of fuels compared to traditional stoves making the investment a very profitable one. Nonetheless, adoption rates are low at a mere 10 percent. It turns out that the major deterrent of adoption are the upfront investment costs – which are much more important than access to information, taste preferences, or the woman’s role in the household. These findings suggest that more direct promotion strategies such as subsidies would help the household to overcome its liquidity constraints and hence improve adoption rates.
    Keywords: Household technology adoption; liquidity constraints; weak beliefs; norms and traditions; energy access; Sub-Saharan Africa
    JEL: D01 D12 D80 O33
    Date: 2014–08
  3. By: Geoffrey M. Ducanes (School of Economics, University of the Philippines Diliman); Edita Abella Tan (School of Economics, University of the Philippines Diliman)
    Abstract: This paper examines the link between poverty and income, on the one hand, and human capital and location, on the other. In the process, the paper proposes a shift in the household indicator of human capital from the usual education of the household head to the education of the most educated member. The paper finds poverty to be most severe and persistent for households with low human capital, and that the effect of human capital varies substantially across locations. Additionally, the paper finds that low human capital households tend to underinvest in the human capital of school-age members, thus likely perpetuating poverty.
    Keywords: human capital, poverty, chronic poverty, regional development, enrolment rates
    JEL: I32 J24 I21 R11
    Date: 2014–06
  4. By: Lori Beaman (Northwestern University); Dean Karlan (Economic Growth Center, Yale University); Bram Thuysbaert (Ghent University); Christopher Udry (Economic Growth Center, Yale University)
    Abstract: We partnered with a micro-lender in Mali to randomize credit offers at the village level. Then, in no-loan control villages, we gave cash grants to randomly selected households. These grants led to higher agricultural investments and profits, thus showing that liquidity constraints bind with respect to agricultural investment. In loan-villages, we gave grants to a random subset of farmers who (endogenously) did not borrow. These farmers have lower – in fact zero – marginal returns to the grants. Thus we find important heterogeneity in returns to investment and strong evidence that farmers with higher marginal returns to investment self-select into lending programs.
    Keywords: credit markets, agriculture, returns to capital
    JEL: D21 D92 O12 O16 Q12 Q14
    Date: 2014–05
  5. By: Jamie Bologna (West Virginia University, College of Business and Economics)
    Abstract: This paper exploits a unique dataset on corruption and informal sector employment in 476 Brazilian municipalities to estimate whether corruption impacts GDP or income levels once variation in informal economic activity is taken into account. Overall, I find that higher levels of corruption and a larger informal economy are generally associated with poor economic outcomes. However, only the size of the informal economy has a statistically significant effect. This effect is robust to the inclusion of a variety of controls and fixed effects, as well as an instrumental variable analysis. Further, these effects are large in magnitude. For example, a one standard deviation increase in the share of total employees that are informally employed explains a decrease in GDP per-capita of about 18 percent.
    Keywords: corruption, informal economy, income levels, growth
    JEL: D73 O17 O43
    Date: 2014–09
  6. By: Kurosaki, Takashi; Khan, Hidayat Ullah
    Abstract: Based on a four-year panel dataset of households collected in rural Pakistan, we examine the impact of an intervention on households’capacity to reduce income losses due to attacks by wild boars. A local NGO implemented the intervention as a randomized controlled trial at the beginning of the second year. We find that the intervention was highly effective in eliminating the crop-income loss in the second year, but that effects disappeared in the third and fourth years. Our finding suggests the difficulty in technology transfer through the training or the high implicit cost incurred by the households in implementing the treatment. Therefore, the intervention was not sustainable at the household level. Nevertheless, due to spillover effects, the intervention could have been cost-effective at the project level.
    Keywords: wild animal attack, production risk, randomized controlled trial, cost-benefit analysis, Pakistan
    JEL: O13 O15 Q12
    Date: 2014–08
  7. By: Iqbal, Farrukh; Kiendrebeogo, Youssouf
    Abstract: Although child mortality rates have declined all across the developing world over the past 40 years, they have declined the most in the Middle East and North Africa region. This paper documents this remarkable experience and shows that it is broad based in the sense that all countries in the Middle East and North Africa experienced significant declines in child mortality over this period and each country did better than most of its comparators. In looking for the sources of the region’s performance edge, the paper confirms the importance of such determinants of child mortality as income growth, education stock, public spending on health, urbanization, and food sufficiency. In addition, the paper establishes that the initial level of mortality has a substantial influence on the pace of subsequent child mortality decline. Of these factors, food sufficiency status is found to contribute to the region’s performance edge over all developing regions, while the other factors are found to matter to varying degrees in selected pairwise regional comparisons.
    Keywords: Population Policies,Regional Economic Development,Early Child and Children's Health,Health Monitoring&Evaluation,Adolescent Health
    Date: 2014–09–01
  8. By: Sabarwal, Shwetlena; Evans, David K.; Marshak, Anastasia
    Abstract: A textbook provision program in Sierra Leone demonstrates how volatility in the flow of government-provided learning inputs to schools can induce storage of these inputs by school administrators to smooth future consumption. This process in turn leads to low current utilization of inputs for student learning. A randomized trial of a public program providing textbooks to primary schools had modest positive impacts on teacher behavior but no impacts on student performance. In many treatment schools, student access to textbooks did not actually increase because a large majority of the books were stored rather than distributed to students. At the same time, the propensity to save books was positively correlated with uncertainty on the part of head teachers regarding government transfers of books. The evidence suggests that schools that have high uncertainty with respect to future transfers are more likely to store a high proportion of current transfers. These results show that reducing uncertainty in school input flows could result in higher current input use for student learning. For effective program design, public policy programs must take forward-looking behavior among intermediate actors into account.
    Keywords: Tertiary Education,Education For All,Primary Education,Secondary Education,Teaching and Learning
    Date: 2014–09–01
  9. By: Marcus H. Böhme; Toni Glaser
    Abstract: We develop a theoretical model of human skill formation and emigration. Additionally to existing brain drain models, we partly endogenize the heterogeneity of the individuals, by introducing aspirations. Emigration of an individual will result in a migration experience, which increases the migrant's aspirations. This will induce her to invest more in the education of her children back home. We find that this aspirations effect increases the average skill level in the society for a given migration rate. We show that the optimal migration rate that maximizes the post-migration skill-rate of the population is higher if we allow for the aspirations effect of migration. We use panel data from Indonesia to demonstrate that a migration experience has an aspirations increasing effect and calibrate our model accordingly. Our results suggest that there are potentially more countries than previously assumed which benefit from migration
    Keywords: migration, brain gain, aspirations, education
    JEL: D03 F22 I25 J61 O15
    Date: 2014–08
  10. By: Dillon, Andrew; McGee, Kevin; Oseni, Gbemisola
    Abstract: Nonseparable household models outline the links between agricultural production and household consumption, yet empirical extensions to investigate the effect of production on dietary diversity and diet composition are limited. Although a significant literature has investigated the calorie-income elasticity abstracting from production, this paper provides an empirical application of the nonseparable household model linking the effect of exogenous variation in planting season production decisions via climate variability on household dietary diversity. Using exogenous variation in degree days, rainfall, and agricultural capital stocks as instruments, the effect of production on household dietary diversity at harvest is estimated. The empirical specifications estimate production effects on dietary diversity using both agricultural revenue and crop production diversity. Significant effects of agricultural revenue and crop production diversity on dietary diversity are estimated. The dietary diversity-production elasticities imply that a 10 percent increase in agricultural revenue or crop diversity results in a 1.8 percent or 2.4 percent increase in dietary diversity, respectively. These results illustrate that agricultural income growth or increased crop diversity may not be sufficient to ensure improved dietary diversity. Increases in agricultural revenue do change diet composition. Estimates of the effect of agricultural income on share of calories by food groups indicate relatively large changes in diet composition. On average, a 10 percent increase in agricultural revenue makes households 7.2 percent more likely to consume vegetables and 3.5 percent more likely to consume fish, and increases the share of tubers consumed by 5.2 percent.
    Keywords: Food&Beverage Industry,Rural Development Knowledge&Information Systems,Regional Economic Development,Rural Poverty Reduction,Economic Theory&Research
    Date: 2014–09–01

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