Working Paper: NBER ID: w31735
Authors: Kate Orkin; Rob 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: aspirations; poverty; psychological intervention; investment; cash transfers
JEL Codes: D14; D91; I38; O12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Workshop aimed at boosting aspirations (I24) | Participants' aspirations (I24) |
| Participants' aspirations (I24) | Investment (G31) |
| Participants' aspirations (I24) | Living standards (I31) |
| Workshop aimed at boosting aspirations (I24) | Investment (G31) |
| Workshop aimed at boosting aspirations (I24) | Living standards (I31) |
| Cash transfers (F16) | Participants' aspirations (I24) |
| Cash transfers (F16) | Investment (G31) |
| Cash transfers (F16) | Living standards (I31) |
| Combined intervention (workshop + cash transfers) (F35) | Participants' aspirations (I24) |
| Combined intervention (workshop + cash transfers) (F35) | Investment (G31) |
| Combined intervention (workshop + cash transfers) (F35) | Living standards (I31) |