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on Microfinance |
| By: | Duvendack, Maren; Palmer-Jones, Richard |
| Abstract: | Recently, microfinance has come under increasing criticism raising questions of the validity of iconic studies which have justified the microfinance phenomenon. This paper applies propensity score matching (PSM), which has become widely used for the analysis of observational data, to the study by Pitt and Khandker (1998) which has been labelled the most rigorous evidence supporting claims that microfinance benefits the poorest especially when targeted on women. After carefully reconstructing the data we differentiate outcomes by gender of borrower, take account of borrowing from several formal and informal sources, and find that the mainly positive impacts of microfinance that we observe are shown by sensitivity analysis to be highly vulnerable to selection on unobservables, and we are therefore not convinced that the relationships between microfinance and outcomes are causal. |
| Keywords: | Microfinance; impact evaluation; Bangladesh; propensity score matching; sensitivity analysis |
| JEL: | C10 C31 O12 |
| Date: | 2011–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:27902&r=mfd |
| By: | Inoue, Takeshi; Hamori, Shigeyuki |
| Abstract: | This paper empirically analyzes the market efficiency of microfinance investment funds. For the empirical analysis, we use an index of the microfinance investment funds and apply two kinds of variance ratio tests to examine whether or not this index follows a random walk. We use the entire sample period from December 2003 to June 2010 as well as two sub-samples which divide the entire period before and after January 2007. The empirical evidence demonstrates that the index does not follow a random walk, suggesting that the market of the microfinance investment funds is not efficient. This result is not affected by changes in either empirical techniques or sample periods. |
| Keywords: | Efficient market hypothesis, Microfinance investment, Variance ratio test, Microfinance |
| JEL: | G14 G21 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper271&r=mfd |
| By: | Cole, Shawn; Gine, Xavier; Tobacman, Jeremy; Topalova, Petia; Townsend, Robert; Vickery, James |
| Abstract: | Why do many households remain exposed to large exogenous sources of non-systematic income risk? This paper uses a series of randomized field experiments in rural India to test the importance of price and non-price factors in the adoption of an innovative rainfall insurance product. The analysis finds that demand is significantly price-elastic, but that even if insurance were offered with payout ratios similar to US, widespread coverage would not be achieved. The paper identifies key non-price frictions that limit demand: liquidity constraints, particularly among poor households, lack of trust, and limited salience. The authors suggest potential improvements in contract design to mitigate these frictions. |
| Keywords: | Financial Literacy,Debt Markets,Access to Finance,Emerging Markets,Labor Policies |
| Date: | 2010–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5504&r=mfd |
| By: | Tomoya Matsumoto (National Graduate Institute for Policy Studies); Takashi Yamano (Foundation for Advanced Studies on International Development; National Graduate Institute for Policy Studies) |
| Abstract: | In this chapter, we evaluate the impact of fertilizer credit on crop choice, crop yield, and income using two-year panel data of 420 households in rural Ethiopia. The fertilizer credit is found to increase input application for crop production. As a consequence, it has a substantial impact on the yield of teff. We also find that the impact on net crop income per cultivated area and also on per capita income is marginal because of the low profitability due to the low output price and high input cost of agricultural production. |
| Keywords: | Input Credit, Fertilizer Policy, Agricultural Technology, Crop Production, Ethiopia |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:10-23&r=mfd |
| By: | Pierre-Andre Chiappori; Krislert Samphantharak; Sam Schulhofer-Wohl |
| Abstract: | We measure heterogeneity in risk aversion among households in Thai villages using a full risk-sharing model and complement the results with a measure based on optimal portfolio choice. Among households with relatives living in the same village, full insurance cannot be rejected, suggesting that relatives provide something close to a complete-markets consumption allocation. There is substantial heterogeneity in risk preferences estimated from the full-insurance model, positively correlated in most villages with portfolio-choice estimates. The heterogeneity matters for policy: Although the average household would benefit from eliminating village-level risk, less-risk-averse households who are paid to absorb that risk would be worse off. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmwp:683&r=mfd |