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Thursday, November 28, 2013

First World Solution Meets Third World Problem

And why technology is exciting, but exciting doesn't often work. Jason Cass writes in the NYTimes about some of our fumbling approaches to get people toilets.
Just consider some of the parameters of the Gates Foundation’s first Reinvent the Toilet Challenge: Create a “practical” toilet that is suitable for a single-family residence in the developing world. Make sure it takes in the bodily waste of an entire family and outputs drinkable water and condiments, like salt. And while you’re at it, make sure that the toilet is microprocessor-supervised and converts feces into energy. And all this has to cost just pennies per person per day. That’s some toilet. 
The winner of last year’s contest invented a solar-powered toilet that converts poop into energy for cooking. Impressive — but each one costs $1,000. 
Other models boasted membrane systems, treatment of fecal sludge using supercritical water oxidation (heating water to 705 degrees Fahrenheit, or 374 degrees Celsius, then injecting oxygen) and hydrothermal carbonization (oxidizing feces at a high temperature and high pressure while under water). 
High-tech toilets are exciting, but even the Gates Foundation has admitted that “the economics of such a solution remain uncertain.” In plain English: No one can afford them.
Contrast this though to the success we have had in getting the poor to use mobile phones. It appears to have done wonders. A favorite documented case is this paper by Jensen for fishermen in Kerala. Upon introduction of mobile phones, prices of fish between markets stabilized, reducing excess in supply or demand, and reducing spoiled fish.

Inventing technology is one thing, but getting the poor to use them is another.

Wednesday, November 27, 2013

Why We Must Replicate

@JustinWolfers on Twitter alerts me to this graph.

X's are the original psych study; Dots are replications. As you will notice, the first study often overestimates or underestimates what is probably the true effect of an experiment and by a significant margin.

And so the task is to replicate. But incentives are not aligned and what is often rewarded in journals is originality. Perhaps there is need for a of Journal of Replication?

The original source is here:

Tuesday, November 12, 2013

Remittances as Insurance

Part of what will help the Philippines recover from the latest storm will be the potentially massive amounts of remittances migrants overseas will send home for relief and rehabilitation efforts. Remittances act as insurance, rising in the wake of negative shocks like extreme weather events. Dean Yang, my advisor, has written the paper that documents this:
Do remittances sent by overseas migrants serve as insurance for recipient households? In a study of how remittances from overseas respond to income shocks experienced by Philippine households, changes in income are found to lead to changes in remittances in the opposite direction, consistent with an insurance motivation. Roughly 60 percent of declines in household income are replaced by remittance inflows from overseas. Because household income and remittances are jointly determined, rainfall shocks are used as instrumental variables for income changes. The hypothesis cannot be rejected that consumption in households with migrant members is unchanged in response to income shocks, whereas consumption responds strongly to income shocks in households without migrants.
I know many see outmigration as a downright bad outcome (and I still believe the evidence for this is lacking), but they will have to admit this is one of the benefits of being one of the largest migrant-sending countries in the world.

I have tried to do as much as I can this morning. What I'm worried about now is whether these will actually get to the people who need it the most.

Friday, November 8, 2013

Do Politicians' Relatives Get Better Jobs? Evidence from the Philippines

In this paper, we exploit naming conventions and a unique dataset to estimate the positive and negative impacts of being connected to local politicians on occupational choice. We use a large administrative dataset collected between 2008 and 2010 on 20 million individuals in 709 Philippine municipalities along with information on all 38,448 local candidates in the 2007 and 2010 elections in those municipalities. Unusually, the data include family names of all individuals surveyed and we rely on local naming conventions to assess blood and marriage links between households.
The probability of being employed in a managerial position increases by 0.54 percentage-points, or more than 22 percent of the control group mean, for individuals related to current offi ce holders. ...
From my favorite paper out of the NEUDC. They use a dataset of 20 million individuals - wow!

If you are from the Philippines, this is probably not at all surprising. This is something we know, and probably accept.

But these are very large effects. I wonder what the 22 percent effect is equivalent to. Is that equivalent to having a college education, an additional year of schooling, in the Philippines?

Tuesday, November 5, 2013

Who are we to say what's good for them?

We usually fear that giving the poor money unconditionally leads them to spend it on beer or cigarettes. And that this is horrible. Which is why the latest evaluation of GiveDirectly that provides unconditional cash transfers to poor Kenyan households made such big news last week. Researchers found that the program does *not* increase spending on temptation goods for poor households.

But what if, Jishnu Das asks, they actually spent it on such goods. Should it matter?
...what if they spent it on a bottle of beer at the end of a 12-hour shift or working in the field so that they could relax? Is that really so bad?
To be clear: The answer “does giving cash work well” is a well-defined question only if you are willing to say that “well” is something that WE, the donors, want to define for families whom we have never met and whose living circumstances we have probably never spent a day, let alone a lifetime, in. ...
... Look, I understand that donors are worried about people not using the money “responsibly”. But, as my colleague Paul Niehaus, a professor at UC-San Diego, a fine theorist and one of the founders of Give Directly told me, “Substance abuse is a real issue that we shouldn’t trivialize, but it is pretty ironic the number of conversations I have had with development people about the poor and their drinking—over drinks.” This debate caters primarily to the fears of rich donors, all paragons of virtue who top the charts in the world’s leading beer drinkers. If we can stop the waste of resources and brainpower on answering questions that stem from a purely elitist mindset, we can start (again) by asking: What are the market failures, and how do we fix them? Because redistributing cash was one of the two things that governments were supposed to do, fixing market failures was the other. So yes, cash is not a panacea for poverty, and that’s something we have known for a long, long, time. But it also goes a long, long, way.
There is perhaps more to this issue. Individuals probably do not always know what's best for them; but equally so, do policymakers know any better?

In the same vein, many also fear that migrant remittances, which is another form of cash transfers, are spent "badly." But in the end, who are we to say what's good for these people?