Working Paper: CEPR ID: DP18493
Authors: Kate Orkin; Robert Garlick; Mahreen Mahmud; Richard Sedlmayr; Johannes Haushofer; Stefan Dercon
Abstract: How do aspirations influence investment decisions for people living in poverty? Does this change as peoples economic conditions improve? To answer these questions, we design a workshop teaching techniques to raise aspirations and plan to achieve them. We cross-randomise this with large unconditional cash transfers in a 415-village, 8,300-person, 1.5-year experiment in Kenya. The workshop substantially raises aspirations, investment, and living standards. But the workshop+cash produces similar effects to cash alone, potentially because cash raises aspirations. Thus, helping people living in poverty set higher aspirations can raise investment and living standards, but improving economic conditions can activate the same process.
Keywords: investment; aspirations; cash transfers
JEL Codes: D03; I31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| aspirations and planning workshop (O21) | aspirations (Y60) |
| aspirations (Y60) | investments (G11) |
| investments (G11) | living standards (I31) |
| aspirations and planning workshop (O21) | economic outcomes (F61) |
| cash transfers (F24) | aspirations (Y60) |
| cash transfers + workshop (F16) | aspirations and expectations (D84) |
| cash transfers (F24) | living standards (I31) |
| cash transfers (F24) | workshop effects (C90) |