Working Paper: CEPR ID: DP10224
Authors: Tanguy Bernard; Stefan Dercon; Kate Orkin; Alemayehu Taffesse
Abstract: Poor people often do not make investments, even when returns are high. One possible explanation is that they have lowaspirations and form mental models of their future opportunities which ignore some options for investment. This paper reportson a field experiment to test this hypothesis in rural Ethiopia. Individuals were randomly invited to watch documentaries aboutpeople from similar communities who had succeeded in agriculture or business, without help from government or NGOs. Aplacebo group watched an Ethiopian entertainment programme and a control group were simply surveyed. In addition, thenumber of people invited was varied by village to assess the importance of peer effects in formation of aspirations. Six months after screening, aspirations had improved among treated individuals and did not change in the placebo or control groups. Treatment effects were larger for those with higher pre-treatment aspirations. We also find treatment effects on savings, use of credit, children's school enrolment and spending on children?s schooling, suggesting that changes in aspirations can translate into changes in a range of forward-looking behaviours. There are also treatment effects on measures from psychology and sociology, including locus of control, which theory predicts should behave in similar ways to aspirations. Most effects are robust to corrections for multiple testing. Peer effects results in further impact on educational spending and induce more work and less leisure. The result that a one-hour documentary shown six months earlier induces actual behavioural change suggests a challenging, promising avenue for further research and poverty-related interventions.
Keywords: No keywords provided
JEL Codes: D02; I31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| exposure to the documentary (C90) | aspirations (Y60) |
| aspirations (Y60) | forward-looking behaviors (D84) |
| aspirations (Y60) | savings (D14) |
| aspirations (Y60) | use of credit (G51) |
| exposure to the documentary (C90) | locus of control (G41) |
| higher pretreatment aspirations (I23) | larger treatment effects (C21) |