Working Papers:

Pricing People into the Market:  Targeting through Mechanism Design.”  With Terence Johnson

Subsidy programs designed to increase take-up of products with externalities are typically accompanied by large costs due to the difficulty of screening those who should receive the program from those who would have purchased the good anyway.  We design and implement a platform intended to increase the take-up of improved sanitation services by targeting the poorest households for subsidies.  The project proceeds in two stages, first creating a demand model based on market data and a demand elicitation experiment, and then use the model to predict prices that will maximize take-up subject to an expected budget constraint.  We then test the modeled prices on a new sample of households.  A main feature of the platform is that prices are designed to exclude or raise revenue from households that would likely have otherwise purchased the improved service, while channelling subsidies to households that might otherwise be unable to pay.  We provide evidence that the targeting strategy successfully identified households who would otherwise have failed to purchase improved services.  Households in the treatment group were 1.7 percentage points more likely to purchase a mechanical desludging, leading to an increase of market share of mechanical desludging of 5.1 percentage points.  The increased probability of purchasing a mechanical desludging among those with the largest subsidies was 3 percentage points.  The health impacts among the poorest were large:  high subsidy households saw a decrease in the probability that one of their children had diarrhea of 7.1 percentage points. 

“Pricing Winners:  Optimizing Just-in-time Procurement Auctions in Dakar, Senegal” With Jean-Francois Houde, Terence Johnson, and Laura Schechter.

Many markets in developing countries, particularly those focused on public services, are marked by inefficiencies stemming from mismatches between demand and supply which generate high prices and low provision in equilibrium.  We institute a centralized market with just-in-time procurement auctions over three years from 2013-2016 as a laboratory in which to investigate the supply for sanitation services in Dakar.  We use the bidding response of desludging operators to changes in the auction format and their competitors to monitor firm marginal costs, outside options, information rents, and expected profit from entry.  We are interested in estimating the extent to which centralized auctions can reduce prices in the market and increase the take-up of mechanized desludging services.  We show that centralizing the market can lead to large price reductions: while the current non-optimized (laboratory) version of the market led to a 7% decrease in prices and a 23% use of the service by those calling in for an auction, we show that first-best marginal cost pricing would lead to a take-up of 73% and the second best optimal invitation mechanism can increase take-up to 37%.

“Mobile Payment Systems: The Impact of Earmarked Savings on Sanitation Purchases” with Laura Schechter  R&R,  Journal of Development Economics

We test whether access to a mobile money savings vehicle increases the propensity of households to purchase an improved sanitation service.  We find that the ability to save through the mobile money program whenever the household has funds available increases the probability that households purchase the sanitation service from our program by 5.7 percentage points.  Households allowed to save in the mobile accounts at their own rate were 5.9 percentage points more likely to use the account and deposited 19% more money in their accounts than households asked to deposit the full amount. The increase in use of the program desludging was not accompanied by an overall increase in take-up: in general households which were allowed to save through mobile money account substitute away from purchasing the service in the general market rather than substituting from the un-improved service. Usage of the savings accounts overall was low at 23%. Poor, more vulnerable households with low education, fluctuating incomes, and who tend to borrow rather than lend to other households are the most likely to take advantage of the opportunity to save in the accounts, while households which already managed to use savings to pay for desludgings were less likely to be affected by the option to save at will.

Agricutural Productivity and Deforestation in Brazil.” With Juliano Assuncao, Ahmed Mushfiq Mobarak, and Dimitri Szerman

Increasing agricultural productivity can have ambiguous effects on forest protection in theory: it can expand the scope of farming, which is detrimental to the forest, but it can also induce farmers to intensify their production. We examine these predictions using county-level data from five waves of the Brazilian Census of Agriculture.

We identify productivity shocks using the expansion of rural electrification in Brazil during 1960-2000. We show that electrification increased crop productivity, and farmers subsequently both expand farming through frontier land conversion, but also shift away from land-intensive activities and into capital- and labor-intensive activities. The net effect depends on the county’s land use prior to the increase in agricultural productivity, but it reduces deforestation in the typical county in the sample.

Timing to the Statement:  Understanding Fluctuations in Consumer Credit Use,” with Sumit Agarwal and Amit Bubna, R&R, Management Science.

The within-month timing of credit card spending provides evidence on the smoothing of consumption and consumer sophistication in the use of financial products; consumers manage their credit card spending in order to optimize their use of the free float that the card provides. Using exogenous variation in the statement date, we show that consumers spend 20-27% more per day in the first week following the receipt of a credit card statement than in the days just prior to the statement.  This includes both an increase in the likelihood that they use the credit card in the first weeks following their statement and an increase in transaction amount on days they use the credit card. In contrast, debit card spending is unaffected by credit card statement issuance. These effects are strongest among discretionary spending categories.  The consumers most apt to spend early in the credit card cycle tend to be those who benefit most from the free float:  those who do not revolve balances and those who are not close to their credit limit.  We test and reject several alternative explanations:  timing to credit card payment dates, mental accounting, and automatic payments.

Leader Networks and Targeting: A randomized controlled trial testing the effectiveness of local religious and Governmental leaders with Robert Dowd and Danila Pankov

Households in developing countries rely on both religious and secular networks for informal access to jobs, insurance, information, and a variety of other services, but there is little evidence on the relative effectiveness of religious versus secular organizations in providing public services in developing countries.  We randomly varied the local promoter of water treatment tablets assigned by an NGO program in 193 villages in Western Uganda in order to test the effectiveness of religious versus secular leaders in encouraging take up of water treatment tablets within their villages.  We find that secular LC1 leaders were most effective at increasing the purchase of water-purifying tablets.  Protestant and Muslim leaders did increase the take up of the tablets, but there was no increase in use of the tablets in villages randomly assigned to have the intervention lead by Catholic leaders.  We develop a simple theoretical model which shows that leaders focusing on poorer populations may end up with lower overall take-up rates for a given effort level and project budget.  We investigate several mechanisms through which the impacts of the leaders differ including effort level, marketing ability,  monetary incentives, and targeting.

Papers in Progress:

“Using Market Mechanisms to Increase the Take-up of Improved Sanitation,” with Jean-Francois Houde, Jared Gars,  Mbaye Mbeguere, and Laura Schechter.

“Spillovers and Social Interactions in Urban Sanitation,” with Laura Schechter.

“The Impact of Development Projects on Leader Popularity and Effectiveness,” with Robert Dowd and Danila Pankov.

“Supply responses to changes in input costs:  Evidence from sanitation markets in Senegal.”  With Jean-Francois Houde and Laura Schechter.

“The Impact of Land Tenure Reform on Deforestation:  Evidence from the Brazilian Amazon.”  With Niveditha Prabakaran.