nep-dev New Economics Papers
on Development
Issue of 2015‒05‒30
fourteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Trains, Trade and Transaction Costs: How does Domestic Trade by Rail affect Market Prices of Malawi Agricultural Commodities? By Wouter Zant
  2. Unconditional cash transfers and children's educational outcomes: Evidence from the old-age pension programme in South Africa . By Jessica Standish-White; Arden Finn
  3. Poverty dynamics in India between 2004 and 2012 : insights from longitudinal analysis using synthetic panel data By Dang,Hai-Anh H.; Lanjouw,Peter F.
  4. Women’s Empowerment in Action: Evidence from a Randomized Control Trial in Africa By Oriana Bandiera; Niklas Buehren; Robin Burgess; Markus Goldstein; Selim Gulesci; Imran Rasul; Munshi Sulaiman
  5. Agricultural technology choice and transport By Ali,Rubaba; Barra,Alvaro Federico; Berg,Claudia N.; Damania,Richard; Nash,John D.; Russ,Jason Daniel
  6. Investigating the gender gap in agricultural productivity : evidence from Uganda By Ali,Daniel Ayalew; Bowen,Frederick H.; Deininger,Klaus W.; Duponchel,Marguerite Felicienne
  7. Do public health interventions crowd out private health investments ? Malaria control policies in Eritrea By Carneiro,Pedro; Armand,Alex; Locatelli,Andrea; Mihreteab,Selam; Keating,Joseph Aaron
  8. Global Poverty Goals and Prices: How Purchasing Power Parity Matters By Jolliffe, Dean; Prydz, Espen Beer
  9. Economic Impact of Illness with Health Insurance but without Income Insurance By Sven Neelsen; Supon Limwattananon; Owen O'Donnell; Eddy van Doorslaer
  10. Tracking Under-Reported Financial Flows: China’s Development Finance and the Aid-Conflict Nexus Revisited By Austin M. Strange; Bradley Parks; Michael J. Tierney; Andreas Fuchs; Axel Dreher
  11. The network at work: Diffusion of banana cultivation in Tanzania By Anna Folke Larsen
  12. Transport infrastructure and welfare : an application to Nigeria By Ali,Rubaba; Barra,Alvaro Federico; Berg,Claudia N.; Damania,Richard; Nash,John D.; Russ,Jason Daniel
  13. Couple’s reports of household decision-making, unmet need for contraception, and unintended pregnancy in Bangladesh By Uddin, Jalal; Pulok, Mohammad Habibullah; Sabah, Md. Nasim-Us
  14. Just a Few Cents Each Day: Can Fixed Regular Deposits Overcome Savings Constraints? By Anett John (née Hofmann)

  1. By: Wouter Zant (VU University Amsterdam, the Netherlands)
    Abstract: We measure the impact of low cost transport by rail in Malawi on the dispersion of agricultural commodities prices across markets, by exploiting the quasi experimental design of the nearly total collapse of domestic trade by rail in January 2003, due to the destruction of a railway bridge at Rivirivi, Balaka. Market pairs connected by rail when the railway line was operational, are intervention observations. Estimations are based on monthly market prices of four agricultural commodities (maize, groundnuts, rice and beans), in 27 local markets, for the period 1998-2006. Railway transport services explain a 11% to 18% reduction in price dispersion across markets. Geographical reach of trade varies by crop, most likely related to storability and geographical spread of production. Perishability appears to increase impact reflecting the lack of intertemporal arbitrage. Overall, impacts are, however, remarkably similar in size across commodities.
    Keywords: trade; crop prices; transaction costs; rail infrastructure; Malawi; sub Saharan Africa
    JEL: F14 N77 O13 O18 O55 Q13
    Date: 2015–05–18
  2. By: Jessica Standish-White (Graduate student at the University of Oxford); Arden Finn (Doctoral student and researcher at the Southern Africa Labour and Development Unit, University of Cape Town)
    Abstract: We use longitudinal data from three waves of South Africa's National Income Dynamics Study to estimate the effect of pension receipt in the household on children's educational outcomes in South Africa. We find that children who co-reside with a pensioner achieve better educational outcomes than those who do not, while controlling for a wide number of individual and household characteristics. In particular, we find that the sex of the pension recipient matters - the positive impact on a child's progression through school is greater if a female, rather than a male, receives the pension.We explore some of the possible mechanisms behind this, including differential school absenteeism rates and differential spending on non-fee schooling expenses.
    Keywords: Social grants, education, South Africa
    JEL: H55 I38 D13
    Date: 2015
  3. By: Dang,Hai-Anh H.; Lanjouw,Peter F.
    Abstract: Recent National Sample Surveys point to significant poverty reduction in India since 2004/05, with a marked acceleration between 2009/10 and 2011/12. This paper enquires into important aspects of income mobility between 2004/05 and 2011/12, based on new statistical methods to convert the three pertinent National Sample Survey rounds into synthetic panels. The analysis draws on the synthetic panels to derive a vulnerability line for India that can be used to separate out a population subgroup comprising non-poor households facing a heightened risk of falling into poverty. The paper documents a strong pattern of upward mobility out of poverty and vulnerability into the middle class, with a noticeable acceleration between 2009/10 and 2011/12. The paper further undertakes a careful investigation into the comparability of the survey rounds, prompted by the observation that fairly significant modifications had been made to survey questionnaires. The findings suggest that changes in questionnaire design have not compromised the comparability of the data.
    Keywords: Rural Poverty Reduction,Regional Economic Development,Pro-Poor Growth,Urban Partnerships&Poverty
    Date: 2015–05–20
  4. By: Oriana Bandiera; Niklas Buehren; Robin Burgess; Markus Goldstein; Selim Gulesci; Imran Rasul; Munshi Sulaiman
    Abstract: Women in developing countries are disempowered relative to their contemporaries in developed countries. High youth unemployment and early marriage and childbearing interact to limit human capital investment and enforce dependence on men. In this paper we evaluate an attempt to jump-start adolescent women's empowerment in the world's second youngest country: Uganda. In this two-pronged intervention, adolescent girls are simultaneously provided vocational training and information on sex, reproduction and marriage. Relative to adolescents in control communities, after two years the intervention raises the likelihood that girls engage in income generating activities by 72% (mainly driven by increased participation in self-employment), and raises their monthly consumption expenditures by 41%. Teen pregnancy falls by 26%, and early entry into marriage/cohabitation falls by 58%. Strikingly, the share of girls reporting sex against their will drops from 14% to almost half that level and preferred ages of marriage and childbearing both move forward. The findings indicate that women's economic and social empowerment can be jump-started through the combined provision of vocational and life skills, and is not necessarily held back by insurmountable constraints arising from binding social norms.
    JEL: I25 J13 J24 O12
    Date: 2014–03
  5. By: Ali,Rubaba; Barra,Alvaro Federico; Berg,Claudia N.; Damania,Richard; Nash,John D.; Russ,Jason Daniel
    Abstract: This paper addresses an old and recurring theme in development economics: the slow adoption of new technologies by farmers in many developing countries. The paper explores a somewhat novel link to explain this puzzle -- the link between market access and the incentives to adopt a new technology when there are non-convexities. The paper develops a theoretical model to guide the empirical analysis, which uses spatially disaggregated agricultural production data from Spatial Production Allocation Model and Living Standards Measurement Study survey data for Nigeria. The model is used to estimate the impact of transport costs on crop production, the adoption of modern technologies, and the differential impact on returns of modern versus traditional farmers. To overcome the limitation of data availability on travel costs for much of Africa, road survey data are combined with geographic information road network data to generate the most thorough and accurate road network available. With these data and the Highway Development Management Model, minimum travel costs from each location to the market are computed. Consistent with the theory, analysis finds that transportation costs are critical in determining technology choices, with a greater responsiveness among farmers who adopt modern technologies, and at times a perverse (negative) response to lower transport costs among those who employ more traditional techniques. In sum, the paper presents compelling evidence that the constraints to the adoption of modern technologies and access to markets are interconnected, and so should be targeted jointly.
    Keywords: Economic Theory&Research,Agricultural Knowledgeand Information Systems,Technology Industry,Transport Economics Policy&Planning,ICT Policy and Strategies
    Date: 2015–05–18
  6. By: Ali,Daniel Ayalew; Bowen,Frederick H.; Deininger,Klaus W.; Duponchel,Marguerite Felicienne
    Abstract: Women comprise 50 percent of the agricultural labor force in Sub-Saharan Africa, but manage plots that are reportedly on average 20 to 30 percent less productive. As a source of income inequality and aggregate productivity loss, the country-specific magnitude and drivers of this gender gap are of great interest. Using national data from the Uganda National Panel Survey for 2009/10 and 2010/11, the gap before controlling for endowments was estimated to be 17.5 percent. Panel data methods were combined with an Oaxaca decomposition to investigate the gender differences in resource endowment and return to endowment driving this gap. Although men have greater access to inputs, input use is so low and inverse returns to plot size so strong in Uganda that smaller female-managed plots have a net endowment advantage of 12 percent, revealing a larger unexplained gap of 29.5 percent. Two-fifths of this unexplained gap is attributed to differential returns to the child dependency ratio and one-fifth to differential returns to transport access, implying that greater child care responsibilities and difficulty accessing input and output markets from areas without transport are the largest drivers of the gap. Smaller and less robust drivers include differential uptake of cash crops, and differential uptake and return to improved seeds and pesticides.
    Keywords: Regional Economic Development,Housing&Human Habitats,Labor Policies,Crops and Crop Management Systems,Rural Development Knowledge&Information Systems
    Date: 2015–05–11
  7. By: Carneiro,Pedro; Armand,Alex; Locatelli,Andrea; Mihreteab,Selam; Keating,Joseph Aaron
    Abstract: It is often argued that engaging in indoor residual spraying in areas with high coverage of mosquito bed nets may discourage net ownership and use. This is just a case of a public program having perverse incentives. This paper analyzes new data from a randomized control trial conducted in Eritrea, which surprisingly shows the opposite: indoor residual spraying encouraged net acquisition and use. The evidence points to the role of imperfect information. The introduction of indoor residual spraying may have made the problem of malaria more salient, leading to a change in beliefs about its importance and to an increase in private health investments.
    Keywords: Disease Control&Prevention,Housing&Human Habitats,Malaria,Population Policies,Health Monitoring&Evaluation
    Date: 2015–05–15
  8. By: Jolliffe, Dean (World Bank); Prydz, Espen Beer (World Bank)
    Abstract: With the recent release of the 2011 purchasing power parity (PPP) data from the International Comparison Program (ICP), analysts and institutions are confronted with the question of whether and how to use them for global poverty estimation. The previous round of PPP data from 2005 led to a large increase in the estimated number of poor in the world. The 2011 price data suggest that developing countries' incomes in PPP-adjusted dollars are significantly higher than indicated by the 2005 PPP data. This has created the anticipation that the new PPP data will decrease significantly the count of poor people in the world. This paper presents evidence that if the global poverty line is updated with the 2011 PPP data based on the same set of national poverty lines that define the $1.25 line in 2005 PPPs, and if the 2011 PPP conversion factors are used without adjustments to selected countries, the 2011 poverty rate is within half a percentage point of the current global estimate based on 2005 PPPs. The analysis also indicates that the goal of 'ending' extreme poverty by 2030 continues to be an ambitious one.
    Keywords: global poverty, International Comparisons Program, purchasing power parity
    JEL: I3 I32 E31 F01
    Date: 2015–05
  9. By: Sven Neelsen (Erasmus University Rotterdam, the Netherlands); Supon Limwattananon (Ministry of Public Health, Thailand; Khon Kaen University, Thailand); Owen O'Donnell (Erasmus University Rotterdam, the Netherlands); Eddy van Doorslaer (Erasmus University Rotterdam, the Netherlands)
    Abstract: We examine economic vulnerability to illness when, as for informal sector workers in Thailand, there is universal coverage for health care but earnings losses are uninsured. Even with comprehensive health care entitlement, severe illness that strikes an initially healthy worker is found to raise out-of-pocket medical expenses by around two thirds and increase the probability that medical spending absorbs more than a tenth of the household budget by nine percentage points. Moreover, severe illness reduces the probability of remaining in employment by 18 points and precipitates a reduction in household labor income of almost one third. Despite the rise in medical expenses and fall in earnings, households are able to maintain expenditure on goods and services other than medical care by drawing on remittances and informal transfers, cutting back on saving, and by borrowing. In the short term, informal insurance fills gaps left uncovered by formal insurance but there is likely to be subst antial exposure to economic risks associated with long-term illness.
    Keywords: Health; medical expenditure; social insurance; universal coverage; Thailand
    JEL: I13 O12
    Date: 2015–05–21
  10. By: Austin M. Strange (Harvard University); Bradley Parks (College of William and Mary); Michael J. Tierney (College of William and Mary); Andreas Fuchs (University of Heidelberg); Axel Dreher (University of Heidelberg)
    Abstract: China’s provision of development finance to other countries is sizable but reliable information is scarce. We introduce a new open source methodology for collecting project-level development finance information and create a database of Chinese official finance to Africa from 2000-2011. We find that China’s commitments amounted to approximately US$ 73 billion, of which US$ 15 billion are comparable to Official Development Assistance following OECD definitions. We provide details on 1,511 projects to 50 African countries. We use this database to extend previous research on aid and conflict, which suffers from omitted variable bias due to the exclusion of Chinese development finance. Our results show that sudden withdrawals of “traditional” aid no longer induce conflict in the presence of sufficient alternative funding from China. Our findings highlight the importance of gathering more complete data on the development activities of “non-traditional donors” to better understand the link between aid and conflict.
    Keywords: Development Finance; Foreign Aid; Non-DAC Donors; South-South Cooperation; China; Africa; Aid Shocks; Violent Armed Conflict; Civil War; Intrastate War
    JEL: F35 F51 D74
    Date: 2015–05–27
  11. By: Anna Folke Larsen (Department of Economics, University of Copenhagen)
    Abstract: This paper investigates the role of networks for diffusion of improved banana cultivation introduced by an agricultural project in Tanzania. In the existing literature on networks and technology adoption, network effects are interpreted as learning. I show that a farmer's network can affect the adoption of a new crop not only through social learning, but also by providing necessary inputs for adoption. I set up a simple model for adoption and derive similar model implications for the provision of either inputs or information through the network. Empirically, I find that a farmer is 37 percentage points more likely to adopt banana cultivation if there is at least one project participant growing bananas in the farmer's network. I use three falsication tests to support causal interpretation of the network effect on adoption. Provision of inputs (banana seedlings) through networks is found to play an important role for the network effects found.
    Keywords: Technology adoption, networks, agriculture, Tanzania, Africa
    JEL: D83 O13 O33 Q12 Q16
    Date: 2015–05–25
  12. By: Ali,Rubaba; Barra,Alvaro Federico; Berg,Claudia N.; Damania,Richard; Nash,John D.; Russ,Jason Daniel
    Abstract: Transport infrastructure is deemed to be central to development and consumes a large fraction of the development assistance envelope. Yet there is debate about the economic impact of road projects. This paper proposes an approach to assess the differential development impacts of alternative road construction and prioritize various proposals, using Nigeria as a case study. Recognizing that there is no perfect measure of economic well-being, a variety of outcome metrics are used, including crop revenue, livestock revenue, non-agricultural income, the probability of being multi-dimensionally poor, and local gross domestic product for Nigeria. Although the measure of transport is the most accurate possible, it is still endogenous because of the nonrandom placement of road infrastructure. This endogeneity is addressed using a seemingly novel instrumental variable termed the natural path: the time it would take to walk along the most logical route connecting two points without taking into account other, bias-causing economic benefits. Further, the analysis considers the potential endogeneity from nonrandom placement of households and markets through carefully chosen control variables. It finds that reducing transportation costs in Nigeria will increase crop revenue, non-agricultural income, the wealth index, and local gross domestic product. Livestock sales increase as well, although this finding is less robust. The probability of being multi-dimensionally poor will decrease. The results also cast light on income diversification and structural changes that may arise. These findings are robust to relaxing the exclusion restriction. The paper also demonstrates how to prioritize alternative road programs by comparing the expected development impacts of alternative New Partnership for Africa's Development projects.
    Keywords: Economic Theory&Research,Roads and Highways Performance,Rural Roads&Transport,Transport Economics Policy&Planning,Banks&Banking Reform
    Date: 2015–05–18
  13. By: Uddin, Jalal; Pulok, Mohammad Habibullah; Sabah, Md. Nasim-Us
    Abstract: Introduction: Previous researches emphasize the role of wife’s sole contribution in household decision-makings as predictor of family planning and reproductive health behaviors in many developing countries. These studies tend to overlook how couple’s joint decision-making may promote better reproductive health outcomes than any partner’s sole decision-makings which lack input or agreement from other partner in a marital relationship. Using married couple’s matched responses in decision-making questions; this study examines the association between couples’ concordant and discordant decision-makings, and wife’s unmet need for contraception and unintended pregnancy in Bangladesh. Methods: This study used couple’s dataset (n= 3336) of Bangladesh Demographic and Health Survey of 2007. Multivariate logistic regression was used to examine the likelihood of unmet need for contraception, and unintended pregnancy among married women of reproductive age. Findings: Study findings reveal that there are substantial levels of both concordance and discordance in responses to household decision-making items. Results from logistic regression analyses suggest that compared to couple’s joint decision making, husband-only or wife-only decision-making is associated with higher risk for women in having both unmet need for contraception and unintended pregnancy. Regression results also indicate that unmet need for contraception and unintended pregnancy are lower among women with lower parity, women from relatively richer households, and women heard family planning messages on television. Conclusion: As couple’s joint decision-making is significantly associated with better reproductive outcomes, policy makers may promote community based outreach programs, and communication campaigns for family planning focusing on egalitarian gender role approach.
    Keywords: Contraception, pregnancy, women’s power, decision-making.
    JEL: I1 I12
    Date: 2015–04–11
  14. By: Anett John (née Hofmann)
    Abstract: Empirical evidence suggests that there is a high demand for informal savings mechanisms even though these often feature negative returns - such as deposit collectors, ROSCAs, microloans, and informal borrowing. This paper argues that individuals may face even higher negative returns to saving at home due to hyperbolic discounting and claims on savings by relatives. I outline a model that shows why hyperbolic discounters cannot reach their welfare-maximising level of savings, and why a commitment savings product with fixed period contributions can increase their achievable savings level. Using a novel dataset obtained from a small microfinance institution in Bangladesh, the paper then presents some first empirical evidence on the effects of a commitment savings product with fixed regular instalments. I find that the introduction of the regular saver product was associated with an increase in individuals' savings contributions of 180 percent after a periods of five months. The paper concludes that the provision of commitment savings products with fixed contributions may reduce savings constraints and increase individuals' welfare, providing a substitute for costly informal mechanisms. However, since the data originates from a field study with self-selection problems rather than a randomized controlled experiment, further studies are needed to confirm this effect.
    Keywords: commitment savings, hyperbolic discounting, Bangladesh
    JEL: D14 O11 O16
    Date: 2014–03

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