Can microcredit be profitable?

A new study by Burke, Bergquist, and Miguel suggests that it can. Not only that: it delivers positive spillovers. I write about it over at Let’s Talk Development.

Microcredit that helps more than just the borrower

Prices in African agricultural markets fluctuate a lot: “Grain prices in major markets regularly” rise “by 25-40% between the harvest and lean seasons, and often more than 50% in more isolated markets.” To an economist, this looks like a massive missed opportunity: Why don’t farmers just hold onto their harvested grain and sell at a much higher price during the lean season?

According to new work by researchers Burke, Bergquist, and Miguel, farmers in Kenya lack access to credit or savings opportunities, and so they “report selling their grain at low post-harvest prices to meet urgent cash needs (e.g., to pay school fees). To meet consumption needs later in the year, many then end up buying back grain from the market a few months after selling it.” It’s like the grain market is a very expensive source of short-term loans.

Can microcredit help? Offering farmers a loan at harvest led them to sell less at harvest time and to sell more grain later, when prices were higher. “The loan produces a return on investment of 28% over a roughly nine month period.”

Read more…

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How do researchers estimate regressions with patient satisfaction at the outcome? A brief review of practice

Recently, Anna Welander Tärneberg and I were doing research with patient satisfaction as the outcome, and we checked how other researchers had estimated these equations in the past. Here is what we found, as documented in the appendix of our recently published paper in the journal Health Economics.

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People use a lot of different methods, and many authors use multiple methods. But there is a rich history of using Ordinary Least Squares regressions to estimate impacts on patient satisfaction. In our paper, we used OLS but verified all the results with Probit and Logit regressions. To add to this list, Dunsch et al. (including me) have a new paper out last week on patient satisfaction in Nigeria, also using OLS as the main estimation method.

Are patients really satisfied?

Yesterday, my new paper — Bias in patient satisfaction surveys: a threat to measuring healthcare quality — was published at BMJ Global Health. It’s co-authored with Felipe Dunsch, Mario Macis, and Qiao Wang.

Here’s a quick rundown of what we learned.

Many health systems use patient satisfaction surveys to gauge one key element of health services: the patient experience. As part of evaluating an intervention to improve health care management in Nigeria, we piloted patient satisfaction questionnaires.

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A common way to measure patient satisfaction is to give patients a series of statements and to ask if they agree or disagree: “The clinic was clean.” “Staff explained your condition well.” That kind of thing. We noticed that people seemed to be agreeing with everything.

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Was that because the quality of care was good, or because saying yes is just easier?

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So we randomly assigned some patients to get the standard statements, and others to get negatively framed statements. “The clinic was dirty.” “Staff were rude.” “Staff explained your condition poorly.”

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Reframing the questions negatively led to significantly lower reports of patient satisfaction on almost every item.

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Sometimes the drops were big, as high as 12 percentage points and 19 percentage points.

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Our work was in Nigeria, but a lot of patient satisfaction questionnaires that we reviewed from a lot of countries use this positive framing.

everybody shrug GIF by Harlem Globetrotters-downsized

But that likely gives a falsely optimistic view of the patient experience.

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Patient satisfaction questionnaires that either mix positive and negative framing, or that avoid agree/disagree formats can do better.

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Of course, the quality of care is much more than patient satisfaction. But good health care systems can and should offer a positive patient experience.

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Check out the paper!

How Angus Deaton thinks you can make the world a better place

When Princeton students come to talk with me, bringing their deep moral commitment to helping make the world a better, richer place, it is these ideas that I like to discuss, steering them away from plans to tithe from their future incomes, and from using their often formidable talents of persuasion to increase the amounts of foreign aid. I tell them to work on and within their own governments, persuading them to stop policies that hurt poor people, and to support international policies that make globalization work for poor people, not against them.

This is (almost) the end of Deaton’s book The Great Escape: Health, Wealth, and the Origins of Inequality. This counsel reminds me of the Commitment to Development Index, which shows that there are many policies that rich countries can enact to help the poor beyond their borders besides providing foreign aid, such as easier migration rules and lower tariffs.

Does increasing teacher salaries improve student test scores?

Over at Development Impact, I just posted a piece — What do we learn from increasing teacher salaries in Indonesia? More than the students did — where I discuss recent work by de Ree et al. on an impressive policy experiment, where Indonesia doubled base pay for many civil service teachers.

Here’s the abstract of their paper:

How does a large unconditional increase in salary affect the performance of incumbent employees in the public sector? We present experimental evidence on this question in the context of a policy change in Indonesia that led to a permanent doubling of teacher base salaries. Using a large-scale randomized experiment across a representative sample of Indonesian schools that accelerated this pay increase for teachers in treated schools, we find that the large pay increase significantly improved teachers’ satisfaction with their income, reduced the incidence of teachers holding outside jobs, and reduced self-reported financial stress. Nevertheless, after two and three years, the increase in pay led to no improvement in student learning outcomes. The effects are precisely estimated, and we can rule out even modest positive impacts on test scores. Our results suggest that unconditional pay increases are unlikely to be an effective policy option for improving the effort and productivity of incumbent employees in public-sector settings.

 

 

a breezy, entertaining journey through Indonesia – a review of Pisani’s book Indonesia, Etc.

indonesia etcIndonesia is the fourth most populated nation in the world, and it’s the fifteenth largest in land area. More than 700 languages are spoken there. It has the largest Muslim population the world, ahead of India and Pakistan. And yet, until now, I know almost nothing about it. Elizabeth Pisani’s recent book — Indonesia, Etc.: Exploring the Improbable Nation — helped to close that gap. Pisani has written an entertaining mix of travelogue, history, and current affairs. Years ago, Pisani worked in Indonesia as a journalist and then later returned as an epidemiologist. Most recently, she spent a year traveling between Jakarta to remote villages across Indonesia’s jungles and coasts. In this book, she brings it all together. It reminds me of the book I might write if I were traveling around Indonesia and sending weekly emails home to friends. The history and the current affairs are mixed in with funny anecdotes and observations, with the result being a not-too-structured approach. But in addition to all the enjoyable, colorful anecdotes, I definitely learned about the history, for example, about early colonization by the Dutch and major differences between the first two presidents, Sukarno and Suharto.

Pisani writes in a deeply familiar and affectionate tone, but I never felt that she condescended. To give you a sense, here is a line on Sukarno, who was “a demagogue whose political recipe was one part populism and three parts theatre, seasoned with mischief and served with a large glass of charisma” and “always better at vision than delivery.” Later, she talks about Indonesia poor showing in international student assessments: “The dismal results are a result of dismal teaching, and that is in turn the result of patronage. A teaching job is the easiest way to squeeze into the coveted beige uniform of the civil servant; local politicians give jobs in schools to their political supporters all the time. That means the schools are rammed with people whose goal is to be a bureaucrat, not an educator. And they behave just other bureaucrats in Indonesia: they see working hours as a movable feast and take time off more or less at will.” And later, students describe the challenge of being taught in English: “The teachers, they cannot speak English too.”

In some accounts, the researcher seeks to be an invisible observer. Pisani doesn’t hide her role as participant, always discussing her interactions with the people around her and often reflecting on people’s perceptions of her: “The possibilities for a short-haired white woman with a face battered by months of boat travel, dressed in long-sleeved cottons, sensible shoes and a black photographer’s waistcoat, a woman who spoke with a Jakarta accent and was always scribbling in a notebook were: in Sumba, a researcher on a malaria study; in Tanimbar and Kei, an anthropologist. In Flores, a nun (!) When I got over to post-tsunami, pre-ballot Aceh, I was either an aid worker or an election monitor. In Kalimantan, I must be from an environmental NGO. In the smaller regions of Indonesia, an English teacher. Here in Weda they assumed I was an engineer.”

For those of us who know little about this giant of a nation, Pisani provides a deeply accessible introduction. I listened to and enjoyed the unabridged audiobook, narrated by Jan Cramer.

I looked at 8 other reviews (below), and only the New York Times comes away with a negative take on the book.
  • Misha Glenny, The Guardian: “Although Pisani cannot really explain all of Indonesia’s et ceteras, she does project a more optimistic and warmer picture of a fascinating country than most outside commentators. For anyone about to visit the place, her book is an essential companion.”
  • Joshua Kurlantzick, The New York Times: “For the most part, [Pisani] remains content to drift back into anecdotes rather than pull them together…. Pisani falls back on easy clichés about Jakarta, reform, and the population itself…. Another opportunity to know the unknown giant is lost.”
  • Ashlee Betteridge, DevPolicy blog: “Part adventurous travelogue, part investigation into nationbuilding, Indonesia Etc. is easy and entertaining to read. For those who have spent some time in the country, you will likely find yourself nodding along with the author’s observations and experiences. For those who know little of our neighbour, it’s a worthy and engaging overview.”
  • The Economist: “There are very few good books in English to help the general reader to understand it. Ms Pisani’s is probably the best. Into a beautifully written, richly entertaining account of a year spent travelling around the archipelago, she weaves a deep knowledge of the country acquired first as a reporter there, and then as an epidemiologist.”
  • Ben Bland, Financial Times: “Occasionally, she overreaches in her pursuit of the colourful phrase (she describes a town on the island of Flores as smelling of “stale sex” after the meat from a whale hunt is hung out to dry) and her insistence on “just saying yes” to new experiences can give her the air of a worthier-than-thou backpacker. But her regular comic mishaps, punchy insights and journalist’s eye for the telling detail more than compensate.”
  • Pallavi Aiyar, L.A. Review of Books: “A rollicking good adventure that knits together a complex of stories and insights, in a feat that rivals the knitting together of the sprawling nation it describes…. To read Indonesia, Etc. is to grow rather fond of both author and country.”
  • Jim Della-Giacoma, New Mandala: “Pisani has produced a book on Indonesia that is as fresh for the novice as for those who have a lifetime of experience in the country.”
  • Kirkus Reviews: “A brave, lively writer opens up a wondrous, changing nation.”