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Category: Methods

A Cheap Way to Measure Welfare in Developing Countries?

From a post by David Aronson on the Congo Resources blog:

“One thought occurred to me: Cell phone minutes. Cell phones are pretty ubiquitous, at least in town. Most people don’t have monthly plans. Instead, they buy cell phone minutes in increments of one to five dollars at a time. When people aren’t doing so well, they purchase fewer of those minutes. When they’re flush, they purchase more. As a proxy for economic trends, then, minutes have several advantages. They aren’t a requirement of life, like rent or food. But neither are they a lagging indicator, the result of pre-existing contracts and commitments, in the way that labor costs might be. Instead, they reflect how well people feel they are doing at the very moment the minutes are purchased. They are, to use an economic term I probably have no business using, highly elastic.”

Three New Papers on the Future of Randomization in Development Economics

These three papers were published last week in the August 2011 issue of the Journal of African Economies and they focus by and large on a possible marriage between structural models and experimental methods. By combining the empirical strength provided by randomization with research questions that go beyond simple impact evaluation, I believe this will represent a very important area for future research, and I am myself involved in a project of this sort.

What’s a Household, And Why It Matters for Development

“Household definitions used in multi-topic household surveys vary between surveys but have potentially significant implications for household composition, production, and poverty statistics. Standard definitions of the household usually include some intersection of keywords relating to residency requirements, common food consumption, and intermingling of income or production decisions. Despite best practices intending to standardize the definition of the household, it is unclear which types of definitions or which intersections of keywords in a definition result in different household compositions. This paper conducts a randomized survey experiment of four different household definitions in Mali to examine the implications for household-level statistics. This approach permits analysis of the trade-offs between alternative definition types. We find that additional keywords in definitions increase rather than decreases household size and significantly alters household composition. Definitions emphasizing common consumption or joint production increase estimates of the levels of household assets and consumption statistics, but not on per adult equivalency asset and consumption statistics, relative to open-ended definitions of the household. In contrast, definition type did not affect production statistics in levels, though we observe significant differences in per adult equivalency terms. Our findings suggest that variations in household definition have implications for measuring household welfare and production.”