1. 10/11/2013 Aspirations in Rural Ethiopia – Some Findings from a Randomized Field Experiment Tanguy Bernard 1, Stefan Dercon 2, Kate Orkin 2, Fanaye Tadesse 1, Alemayehu Seyoum Taffesse 1 and Ibrahim Worku 1 1 International Food Policy Research Institute, 2 University of Oxford May 2, 2013 Africa House New York University 1

2. Motivation Elements of the aspirations framework Aspirations project Field experiment – design and findings Outline 10/11/20132

3. Conceptual – opportunities Empirical – Why do the poor not invest? Ethiopians and fatalism? Focus 1 - external circumstances and opportunities. Low returns to investments; Unexploited opportunities due to lack of information or knowledge; Social constraints; Focus 2 - constraints associated with the manifested attributes of decision makers Identity issues: sense of self; Psychological issues: impatience, commitment, and psychological barriers Aspirations failure perspective Motivation – why aspirations 10/11/20133

4. Aspirations: A desire or an ambition to achieve something An aim and implied effort to reach it A set of future-regarding preferences Related concepts Economics : Satisficing Psychology : Self-efficacy, locus of control Anthropology : Aspiration failures Common elements Goals and aspirations are important determinants of success; Evolution through time in response to circumstances; Role of social comparisons and learning from relevant others, An individual-level yet culturally (collectively) determined attribute towards exploration of individual-group symbiosis Elements of the Aspirations Perspective 4

5. 10/11/2013 What are Aspirations? Aspirations have two distinctive aspects: Future-oriented - are goals that can only be satisfied at some future time (differ from immediate gratifications); Motivators - are goals individuals are willing, in principle, to invest time, effort or money in to attain (different from idle daydreams and wishes) Note: the willingness to invest is potential, orconditional Aspirations and expectations – preference vs. beliefs; 5

6. Elements of the Aspirations Perspective Why are aspirations important/useful? Aspirations (or the capacity to aspire): Reflect bounded rationality; Are socially determined (social interaction); Are distributed unevenly within communities. Condition individual behaviour and well-being Useful device in analysing and/or addressing poverty 10/11/20136

7. Elements of the Aspirations Perspective How do aspirations condition individual behaviour? Aspiration window: an individuals cognitive world, his/her zone of similar, attainable individuals; Reflects the information and economic opportunities of the local environment; Multi-dimensional (similarity); Aspiration gap: difference between the aspired state and current state Conditions future-oriented behaviour - inverted U relationship between gap and effort A possible outcome is an aspiration failure - lack of pro-active behaviour (or under-investment) towards filling the aspiration gap 10/11/20137

8. Conceptual Schema 10/11/20138

9. Elements of the Aspirations Perspective Measurement Issues Aspirations are not directly observable – Revealed by observed behaviour: interpretation issues (linking aspirations and behaviour) – Elicited using subjective questions: measurement issues Limits to subjective assessment: – Subjects: subjects willingness to report private knowledge, evaluation apprehension, and subject role playing – Instruments (attributes of): order of questions (anchoring), the number of categories on the rating scale (odd-even), the adjectives that are used as the endpoints of the rating scale, and the adverbs that describe scale categories. (e.g. Delavande et al. (2009), Bertrand and Mullainathan (2001) for reviews) 10/11/20139

10. Elements of the Aspirations Perspective Identification issues individual characteristics affect aspirations, aspiration windows and behaviour (e.g. schooling levels, wealth, and family background), Particularly the endogeneity of the aspiration window a key hurdle aspirations cause success – a person with higher aspirations may be more successful. Success causes aspirations – a successful person may revise his/her aspiration to a higher level, or experiment, panel data 10/11/201310

11. The Aspirations project Step 1 – correlates of aspiration-related concepts Step 2 – test and validate a measurement strategy Step 3 – assess validity of the aspiration window hypothesis An experiment Exogenous shock to aspirations: Mini-documentaries of local success stories screened to randomly selected individuals. Placebo: local TV show. 3 rounds of data Baseline pre-treatment (Sept-Dec 2010) Aspirations retest immediately after treatment Follow-up (Mar-May 2011) 10/11/201311

12. Field Experiment - Aspirations Measures 200,000 ETB ~ value of one harvest of chat from one hectare 100,000 ETB ~ value of one harvest of chat from half a hectare 0 ETB 10/11/201312

13. Surveyed : Treatment, 6 households (12 individuals)/village Placebo, 6 households (12 individuals)/village Control, 6 households (12 individuals)/village Non-Surveyed : Treatment, 18 households (36 individuals)/ treatment village Placebo, 18 households (36 individuals)/ placebo village Treatment villagePlacebo village 16 Screening sites, 4 villages/screening site (2 Treatment, 2 Control), 36 households/village (18 households surveyed, 18 households not surveyed) Field Experiment – Design 10/11/201313

14. On going experiment 10/11/201314

15. Field Experiment – Baseline Correlates of Aspirations Income aspiration Wealth aspiration Education aspiration Social status aspiration Aspiration index Age-0.0000.0010.0020.0060.003 (0.000)(0.002)(0.003)(0.003)**(0.001)** Age²0.000-0.000-0.000* -0.000 (0.000) (0.000)*** Gender (Male=1)0.0080.0620.2580.0960.104 (0.002)***(0.036)*(0.051)***(0.049)**(0.021)*** Education (Read/write=1)-0.0000.0680.3330.3120.152 (0.002)(0.070)(0.051)***(0.073)***(0.027)*** R2R2 0.030.010.080.040.07 N1,9641,9671,9321,9571,865 * p<0.1; ** p<0.05; *** p<0.01; Screening site fixed effects included but not reported; Robust standard errors in parentheses 10/11/201315

16. Balance Sample balanced on gender, literacy, age and most outcomes * p<0.1; ** p<0.05; *** p<0.01 All Treatment (T) Placebo (P) Control (C) % compliance by treatment status9593.896.2100 Education (Read/write =1) Gender (% male) Age (complete d years) Baseline Standarized ---- Aspiration IncomeWealth Children's Education Social Status Aggregate Difference: T-C, p-value 0.020.3200.840.150.860.10.140.030.350.050.430.090.08*0.040.12 Difference: P-C, p-value 0.020.3200.930.050.9400.890.050.150.010.830.040.550.010.5 10/11/201316

17. Field Experiment - Compliance and Power of Treatment Treatment (standard error) Placebo (standard error) Difference (p-value) Liked a lot what I saw? 0.950.730.22 (0.02)(0.01)(0.00)*** Discussed it a lot with my neighbours 0.870.710.15 (0.01)(0.02)(0.00)*** Discussed it at least once with neighbours over the past two weeks 0.320.210.11 (0.02) (0.00)*** Content generated a lot of discussion within community 0.920.720.20 (0.01)(0.02)(0.00)*** Assessment of Documentaries and Placebo * p<0.1; ** p<0.05; *** p<0.01 10/11/201317

18. Field Experiment - Compliance and Power of Treatment How does his/her present condition fares compared to yours today? He/she is worse off Were about the same He/she is better off How did his/her initial condition fared compared to yours five years ago? He/she was worse off9.351.4040.19 We were about the same4.832.4912.15 He/she was better off6.701.7121.18 Table 5 – Relevance of documentaries Cell proportions are reported. The totals of all cells add up to 100. N=642 10/11/201318

19. Impact on Aspirations - Estimation strategy 10/11/201319

20. Treatment and Placebo Effects on Aspirations (1)(2)(3)(4) Treatment 0.027 0.026 (0.018) Placebo 0.016 0.015 (0.018) # peers w/treatment 0.026 0.021 (0.010)*** (0.009)** # peers w/placebo 0.001-0.022 (0.010)(0.012)* Baseline aspiration 0.1320.1570.1320.157 (0.062)**(0.050)***(0.062)**(0.050)*** Constant 0.0530.0380.0950.018 (0.035)(0.036)(0.037)***(0.037) R2R2 0.060.070.060.08 N1,2101,2581,2101,258 * p<0.1; ** p<0.05; *** p<0.01; Screening site fixed effects not reported; Robust standard errors in parenthesis 10/11/201320

21. Treatment and Placebo Effects on Aspirations * p<0.1; ** p<0.05; *** p<0.01; Screening site fixed effects not reported; Robust standard errors in parenthesis (1)(2)(3)(4) Treatment 0.051 0.049 (0.023)** (0.023)* Placebo 0.021 0.018 (0.021) # peers w/treatment 0.024 0.032 (0.010)** (0.010)*** # peers w/placebo 0.0150.007 (0.011)(0.014) Baseline expectations 0.4010.0740.4020.075 (0.056)***(0.032)**(0.057)***(0.032)** Constant -0.047-0.070-0.028-0.093 (0.046)(0.048) (0.047) R2R2 0.160.060.160.06 N1,0931,1411,0931,141 10/11/201321

22. Treatment and Placebo Effects on Future-Oriented Behaviour Savings Deposits Withdrawals (1)(2)(3)(4)(5)(6) Treatment 186.9 63.5 33.7 (106.4)* (22.3)*** (17.2)* Placebo 126.1 17.9 4.6 (95.1) (20.6) (9.3) # peers with treatment 34.3 -37.1 -5.4 (85.9) (11.9)*** (6.7) # peers with placebo -28.2 -7.0 7.7 (46.9) (10.5) (6.2) Baseline savings 0.7410.658-0.0110.1370.0040.016 (0.578)(0.513)(0.011)(0.198)(0.017)(0.019) Constant -105.3-24.980.924.155.232.7 (314.9)(271.4)(47.9)*(21.8)(108.1)(16.4)** R2R2 0.160.290.050.040.030.02 N1,2581,2881,2581,2881,2581,288 * p<0.1; ** p<0.05; *** p<0.01; Screening site fixed effects and controls for age, age², gender and education not reported; Robust standard errors in parenthesis Table 10 – Treatment effects on savings behaviour 10/11/201322

23. Treatment and Placebo Effects on Future-Oriented Behaviour Table A1 - Direct and indirect treatment effect on Locus of Control LOC others LOC internal LOC chance Treatment -0.027 0.083 -0.030 (0.051) (0.038)** (0.044) Placebo -0.015 -0.027 -0.028 (0.050) (0.039) (0.043) # peers w/treatment -0.056 -0.016 -0.059 (0.028)** (0.020) (0.023)** # peers w/placebo -0.002 -0.018 0.023 (0.028) (0.023) (0.025) Baseline LOC 0.1960.2120.0890.0980.1660.144 (0.031)***(0.030)*** (0.027)***(0.025)*** Constant 1.7201.7362.7262.6841.9001.911 (0.120)***(0.127)***(0.124)***(0.123)***(0.105)***(0.104)*** R2R2 0.050.060.030.020.05 N1,3411,3721,3421,3731,3411,374 * p<0.1; ** p<0.05; *** p<0.01; Screening site fixed effects not reported; Robust standard errors in parenthesis 10/11/201323

24. Treatment and Placebo Effects on Future-Oriented Behaviour Table A2 - Direct and indirect treatment effect on Perception of Poverty * p<0.1; ** p<0.05; *** p<0.01; Screening site fixed effects not reported; Robust standard errors in parenthesis Poverty due to FatePoverty StructuralPoverty Individual Treatment -0.108 0.033 0.088 (0.048)** (0.038) (0.042)** Placebo -0.005 0.058 0.072 (0.048) (0.037) (0.042)* # peers w/treatment -0.048 -0.046 -0.011 (0.027)* (0.021)** (0.024) # peers w/placebo 0.008 -0.012 -0.005 (0.029) (0.023) (0.025) Baseline percept poverty 0.0600.0280.1110.0520.0580.083 (0.031)*(0.031)(0.033)***(0.030)(0.032)*(0.030)*** Constant 2.3972.5062.4652.7232.9072.869 (0.116)***(0.120)*** (0.114)***(0.124)***(0.119)*** R2R2 0.02 0.03 N 1,3391,3681,3371,3681,3391,370 10/11/201324

25. Observations "Weak" treatment, but: Documentaries affected aspirations, expectations, savings behaviour, and perceptions more than the placebo even 6 months after treatment; Direct and, even more visible, indirect (group) effects are detected – more of an aspiration window story rather than a role model one; Further analysis; Expanding coverage – Malawi, Pakistan via IFPRI; 10/11/201325

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