Results for “duflo”

68 found

Justin Lahart reports:

Friday, the American Economic Association will present the John Bates Clark medal, awarded to the nation’s most promising economist under the age of 40.

The Clark is often a harbinger of things to come. Of the 30 economists who have won it, 12 have gone on to win the Nobel, including last year’s Nobel winner, Paul Krugman. Other past winners include White House National Economic Council director Lawrence Summers and Steve Levitt, of Freakonomics fame. Since it was first awarded in 1947, the Clark has been given out every two years, but beginning next year it will be given out annually.

With a deep pool of young talent to draw from, there’s no sure winner. But among economists, the clear favorite is Esther Duflo, 36, who leads the Massachusetts Institute of Technology‘s Jameel Poverty Action Lab with MIT colleague Abhijit Banerjee.

Ms. Duflo has been at the forefront of the use of randomized experiments to analyze the effectiveness of development programs. If teacher attendance is a problem in rural India, for example, what happens if teachers are given cameras with date and time stamps and told to take a picture of themselves and their students each morning and afternoon? Ms. Duflo and economist Rema Hanna tried it out and found that in the “camera schools,” teacher absences fell sharply and student test scores improved. Does giving poor mothers 60 cents worth of dried beans as an incentive to immunize their children work? It works astoundingly well. By answering these kinds of problems, Ms. Duflo, her colleagues, and the many economists around the world she has helped inspire, are uncovering ways to make sure that money spent on helping poor people in developing countries is used effectively.

Harvard University‘s Sendhil Mullainathan, who founded the Poverty Action Lab with Ms. Duflo and Mr. Banerjee, is also likely on the Clark short list. He’s a leading light in the fast-growing field of behavioral economics, studying ways that psychology influences economic decisions. For one paper, he and frequent co-author Marianne Bertrand sent out fictitious resumes in response to want ads, randomly assigning each resume with very African American sounding or very white sounding names. The resumes with the very white names got far more call backs. Mr. Mullainathan, 36, is also applying behavioral economics insights to development problems. One insight: The behavioral weaknesses of the very poor are no different than the weaknesses of people in all walks of life, but because the poor have less margin for error, their behavioral weaknesses can be much more costly.

Emanuel Saez at the University of Calif.-Berkeley, another Clark candidate, has been tenaciously researching the causes of wealth and income inequality around the world, with a focus on the what’s happening at the very tip of the wealth pyramid. But because there is very little data on the very rich, Mr. Saez, 36, and his frequent co-author Thomas Piketty have combed through income tax figures to come up with historic estimates. Among their findings: That before the onset of the financial crisis, the income share of the top 1% of families by income accounted for nearly a quarter of U.S. income – the largest share since the late 1920s.

David Leonhardt reports a clear winner:

I received dozens of diverse responses, but there was still a
runaway winner. The small group of economists who work at the Jameel
Poverty Action Lab at M.I.T., led by Esther Duflo and Abhijit Banerjee, were mentioned far more often than anyone else.

Ms.
Duflo, Mr. Banerjee and their colleagues have a simple, if radical,
goal. They want to overhaul development aid so that more of it is spent
on programs that actually make a difference. And they are trying to do
so in a way that skirts the long-running ideological debate between aid
groups and their critics.

Abhijit Banerjee, Angus Deaton, and Esther Duflo are all upset.  You might recall the most famous recommendation of the Copenhagen Consensus was to invest in anti-HIV/AIDS programs as a higher priority than global warming.  Banerjee writes:

Similarly, the proposal on HIV/AIDS seems to have entirely missed the mounting evidence…that we do not really know how to get people to behave in ways that would reduce the transmission of HIV.

Angus Deaton writes:

Lomborg’s Consensus does not even identify the "we" who are to spend the $50 billion, although it certainly shares Sachs’ confidence in the usefulness of social engineering by well-meaning outside experts.

Maybe that criticism is unfair; Lomborg might say he is playing by the rules of other people’s games.  Esther Duflo writes:

…to my knowledge there is very little rigorous evidence on effective [HIV-AIDS] prevention strategies in Africa.

The three reviews are all in the Journal of Economic Literature, December 2007.  The bottom line is that $50 billion doesn’t go as far as you might think. 

Mario Rizzo directs my attention to Andrew Oswald’s 2007 paper (Economica) "An Examination of the Reliability of Prestigious Scholarly Journals: Evidence and Implications for Decision-Makers", here is the abstract: 

Scientific-funding bodies are increasingly under pressure to use journal rankings to measure research quality.  Hiring and promotion committees routinely hear an equivalent argument: ‘this is important work because it is to be published in prestigious journal X’.  But how persuasive is such an argument?  This paper examines data on citations to articles published 25 years ago.  It finds that it is better to write the best article published in an issue of a medium quality journal such as the OBES than all four of the worst four articles published in an issue of an elite journal like the AER.  Decision-makers need to understand this.

Here is one summary, consistent with my research and travel experience:

1. "The average person living at under $1 a day does not seem to put
every available penny into buying more calories…Food typically
represents from 56 to 78% [of household spending]."

Despite this, hunger is common. Among the extremely poor in Udaipur, only 57% said their household had enough to eat in the previous year, and 72% report at least one symptom of disease.

2.
"The poor generally do not compain about their health – but then they
do not complain about life in general.  While the poor certainly feel
poor, their levels of self-reported happiness or health are not
particularly low."

3. Spending on festivals – religious ceremonies,
funerals and weddings – is high.  In Udaipur, median spending on these
by people living on $1 a day was 10% of income.

4. In several countries, the extremely poor spend about 5% of income on alcohol and tobacco.

5. In the Ivory Coast, 14% of people on $1 a day have a TV – and 45% of those on $2 a day have one.

6.
Many of the extremely poor get income from more than one source.
Cultivating their own land is not always the main source of income.

7. Participation in microfinance is not as high as you’d think. The poor seem unable to reap economies of scale, therefore.

Here is the underlying paper, by Banerjee and Duflo of MIT, highly recommended, hat tip to Michael Blowhard. 

Here is one more controversial bit, I wonder what they see as the relevant alternative:

…it is easy to see why so many of them are entrepreneurs.  If you
have few skills and little capital, and especially if you are a woman,
being an entrepreneur is often easier than finding a job: You buy some fruits
and vegetables (or some plastic toys) at the wholesalers and start
selling them on the street; you make some extra dosa mix and sell the
dosas in front of your house; you collect cow dung and dry it to sell
it as a fuel; you attend to one cow and collect the milk. As we saw in
Hyderabad, these are exactly the types of activity the poor are
involved in.  It is important, however, not to romanticize the idea of
these penniless entrepreneurs.  Given that they have no money,
borrowing is risky, and in any case no one wants to lend to them, the
businesses they run are inevitably extremely small, to the point where
there are clearly unrealized economies of scale.  Moreover, given that
so many of these firms have more family labor available to them than
they can use, it is no surprise that they do very little to create jobs
for others.  This of course makes it harder for anyone to find a job and
hence reinforces the proliferation of petty entrepreneurs.

Using randomized prospective trials in economic development policy is not new. Since the 1960s, the U.S. has occasionally implemented them to answer important practical questions in health care, welfare and education policy. By randomly splitting people into two groups, one of which receives an experimental intervention, researchers can set up potentially simple, unbiased comparisons between two approaches. But these evaluations typically cost hundreds of thousands to millions of dollars, largely putting them out of reach of academic researchers, says development economist Abhijit Banerjee of the Massachusetts Institute of Technology.

The emergence of cheap, skilled labor in India and other countries during the 1990s changed that, Banerjee says, because these workers could collect the data inexpensively. At the same time, nongovernmental organizations (NGOs) were proliferating and started looking for ways to evaluate their antipoverty programs.

In 2003 Banerjee and his colleagues Esther Duflo and Sendhil Mullainathan founded an M.I.T. institute devoted to the use of randomized trials, called the Poverty Action Lab. Lab members have completed or begun a variety of projects, including studies of public health measures, small-scale loans (called microcredit), the role of women in village councils, AIDS prevention, and barriers to fertilizer use. The studies typically piggyback on the expansion of an NGO or government program. Researchers work with the organization to select appropriate measures of the program’s outcome and hire an agency to collect or spot-check the data.

Here is the full story.  Here is the home page of Poverty Action Lab.  Here are their completed projects.  Here is the Primary School Deworming Project.  And on this Thanksgiving weekend, I once again express my gratitude for the link from www.politicaltheoryinfo.com.

My latest paper (written with Eric Helland) has just been published in Advances in Economic Analysis & Policy. If you don’t have access to this journal you can find the working paper version along with many of my other papers on the forthcoming and published papers section of my web site. Here is the abstract:

We reexamine Mustard and Lott’s controversial study on the affect of “shall-issue” gun laws on crime using an empirical standard error function randomly generated from “placebo” laws. We find that the effect of shall-issue laws on crime is much less well-estimated than the Mustard and Lott (1997) and Lott (2000) results suggest. We also find, however, that the cross equation restrictions implied by the Lott-Mustard theory are supported. A boomlet has occurred in recent years in the use of quasi-natural experiments to answer important questions of public policy. The intuitive power of this approach, however, has sometimes diverted attention from the statistical assumptions that must be made, particularly regarding standard errors. Failing to take into account serial correlation and grouped data can dramatically reduce standard errors suggesting greater certainty in effects than is actually the case. We find that the placebo law technique (Bertrand, Duflo and Mullainathan 2002) is a useful addition to the econometrician’s toolkit.