aspirations psychosocial outcomes and saving in rural ethiopia
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Aspirations, psychosocial outcomes and saving in rural Ethiopia
Tanguy Bernard, Stefan Dercon, Kate Orkin, Alemayhu Seyoum Tafesse18 March 2011
Aspirations
Development discourse and praxis focus on ‘opportunities’
Why do the poor not ‘invest’? Ethiopians and fatalism
Aspirations A desire or an ambition to achieve something An aim and implied effort to reach it Combination of preferences and beliefs
Related concepts Economics: Satisficing Psychology: Self-efficacy, locus of control Anthropology: Aspirations failures
Common elements Goals/aspirations are important to determine success Evolution through time in response to circumstances
Aspirations and poverty
Weak capacity to aspire can translate into low or no investments
Capacity to aspire not evenly distributed between rich and poor the poor have fewer resources for own
experience and observation of others, contributing to low level of aspiration (Appadurai, 2001)
the poor have fewer resources to allocate to modification of their beliefs and perceptions. Prior beliefs about inability for positive changes are thus perpetuated
the poor have little motivation to allocate resources to modify their beliefs and perception
Motivation for research
Difficult to identify effects of aspirations Individual’s resources affect aspirations Individual’s aspirations affect resources
Exogenous shock to aspirations: mini-documentaries of local success stories screened to randomly selected individuals
People who watch a documentary have higher aspirations and more forward-looking behaviour
If more people in a village watch a documentary, aspirations and forward-looking behaviour increases more
Treatment (1) Cluster of 4 villages Individual treatment
Within village TREATMENT: 6 hh given tickets for
documentary 4 short mini-documentaries of local
success stories PLACEBO: 6hh given tickets for a
recreational movie Local television show usually played
around festivals CONTROL: 6 hh surveyed but not given
tickets Village treatment
In 2 villages in the cluster of 4, 18 households are given tickets to a documentary
In the other 2 villages, 18 households are given tickets to a move
Treatment (2)
Village 36 movie
6 documentary
6 nothing+
18 movie
Village 26 movie
6 documentary
6 nothing+18
documentary
Village 16 movie
6 documentary
6 nothing+
18 movie
Village 46 movie
6 documentary
6 nothing+18
documentary
Light = movie
Dark = documentary
BLUE = Surveyed and invited
RED = Invited
BLACK = Surveyed, no invite
Sampling
Village treatment Villages grouped into clusters of 4
villages Then villages randomised: 2 treatment,
2 control
Within each village Households randomly selected for
treatment, control and placebo Tickets for head and head’s spouse in
each household No replacement
3 rounds Baseline pre-treatment (Sept-Dec
2010) Aspirations retest immediately after
treatment Follow-up (Mar-May 2011)
Balance and compliance
Treatment Placebo Control Total
Given ticket 705 729 722 2156
Interviewed baseline 696 725 704 2125
Went to screening 670 705 0 1375
Did second round 686 657 662 2005
All sections 659 657 662 1978
Non-compliance rate 6.52 9.88 8.31 8.26
Sample balanced on gender, literacy, age and most outcomes
Aspiration 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
1 Annual cash income
4 dimensions Annual income in cash Assets – house, furniture, consumer
goods, vehicles Social status – whether people in the
village ask advice on decisions Level of education of oldest child
“What is the level of <> you would like to achieve?”
Standardised
Aspirations
No simple treatment effects and, in fact, a slight decline in wealth aspirations
Further investigation on village treatment
Income Wealth Status Education
Treatment effect 0.029 -0.118 0.072 0.054
0.704 0.052* 0.381 0.548
Placebo effect 0.087 -0.088 0.003 0.068
0.163 0.262 0.967 0.422
Treatment - placebo -0.059 -0.029 0.069 -0.014
0.341 0.826 0.111 0.194
Respondents 1911 1911 1911 1911
Villages 64 64 64 64
* p<0.10, ** p<0.05, *** p<0.01. p values are reported.
Standard errors are robust and corrected for clustering.
Controls for gender, literacy, age, baseline treatment status and time.
Psychosocial measures (1): locus of control
Comes from Rotter’s (1966) social learning theory External control: belief that outcomes are not
determined by personal efforts Internal control: belief that outcomes are
contingent upon actions Internal associated with more active pursuit of
valued goals, information seeking, autonomous decision making, sense of wellbeing.
Measure is an adaptation of Levenson (1981) 4 point scale, 15 items Chance
“To a great extent my life is controlled by accidental/chance happenings.”
“Often there is no chance of protecting my personal interests from bad luck happenings.”
Powerful others “My life is chiefly controlled by other powerful
people.” “People like myself have very little chance of
protecting our personal interests when they conflict with those of more powerful people.”
Internal “When I get what I want, it’s usually because I worked
hard for it.” “My life is determined by my own actions.”
Psychosocial measures (2): Causes of poverty
Perceptions of causes of poverty Feagin’s (1972) Attribution for Poverty
Scale 4 point scale
“I am going to read you some reasons people give for why poor people are poor.”
Structural “The distribution of land between poor and
rich people is uneven” “They lack opportunities due to the fact
that they come from poor families” Fatalistic
“They have bad fate/destiny” “They lack luck”
Individual “They lack the ability to manage money or
other assets” “They do not actively seek to improve their
lives”
Psychosocial measures
Decrease in proportion of treatment group who agree that poverty has “fatalistic” causes
Near increase in proportion of treatment group who agree that poverty has “individual” causes
Chance Internal Powerful others Fate Structural Individual
Treatment effect -0.036 -0.055 0.078 -0.151 0.094 0.106
0.674 0.565 0.373 0.055* 0.146 0.113
Placebo effect -0.064 -0.045 -0.005 -0.045 0.08 0.119
0.411 0.593 0.941 0.549 0.222 0.079*
Treatment - placebo 0.027 -0.01 0.083 -0.106 0.014 -0.013
0.528 0.683 0.597 0.905 0.296 0.435
Respondents 1911 1911 3822 3822 3822 3822
Villages 64 64 64 64 64 64
* p<0.10, ** p<0.05, *** p<0.01. p values are reported.
Standard errors are robust and corrected for clustering.
Controls for gender, literacy, age, baseline treatment status and time.
LOCUS ON CONTROL CAUSES OF POVERTY
Savings
Amount withdrawn from and deposited in savings loans in the last month
Membership of and contributions to iddir (burial societies which can also insure against loss of homes or livestock)
Membership of and contribution to iqqub (savings groups) and voluntary savings and loans groups run by NGO
Savings
Increase in withdrawal and deposit into savings among treatment group Small net increase in savings
No effects on knowledge of VSL programmes, membership of VSL or iddir, contribution to iddir each month
Has savings Total savings Withdrawn from savings Deposited in savings
Whole sample
Had baseline
savings Whole sample
Had baseline
savings
Treatment effect -0.001 57.68 35.015 118.328 30.93 22.271
0.959 0.677 0.017** 0.043** 0.033** 0.079**
Placebo effect 0.017 -73.192 -15.881 -56.33 -34.773 -127.511
0.477 0.692 0.509 0.6 0.5 0.599
Treatment - placebo -0.018 130.873 50.895 174.658 65.703 149.782
0.099 0.401 0.378 0.325 0.557 0.486
Respondents 3822 3822 3822 887 3822 887
Villages 64 64 64 59 64 59
* p<0.10, ** p<0.05, *** p<0.01. p values are reported.
Standard errors are robust and corrected for clustering.
Controls for gender, literacy, age, baseline treatment status and time.
Demand for credit
Actual loans Number of loans taken in last six months Amount of each loan No effects
Hypothetical loans “Someone from a microfinance
institution came to you and offered to lend you any amount of money you ask without charging interest or service charge.”
“How much would you ask for?” In one year In five years In ten years
What would you use the money for?
Hypothetical loans
Increase in amount treatment group would ask for in hypothetical loans in 5 years
In 1 year In 5 years In 10 years
Treatment effect 1310.722 5058.554 3238.836
0.127 0.024** 0.147
Placebo effect 1173.248 1095.106 -1596.74
0.166 0.559 0.569
Treatment - placebo 137.474 3963.448 4835.576
0.137 0.949 0.083
Respondents 1966 1966 1966
Villages 63 63 63
* p<0.10, ** p<0.05, *** p<0.01. p values are reported.
DESIRED HYPOTHETICAL LOANS
Gender and literacy affect aspirations
Male Literate Age
Aspirations Income +
Wealth + +
Status + +
Education + +
Chance - - +
Powerful others + +
Internal - -
Fate - - +
Structural
Individual + +
Savings Has savings - +
Total savings +
Withdrawn
Deposited
1 year + + -
5 years + + -
10 years + + -
CONTROL VARIABLES
Locus of
control
Causes of
poverty
Hypothetical
loan
Men and the literate Higher aspirations Less belief in
chance and fate More belief in
powerful others More belief in
individual control Higher hypothetical
demand for credit
Literate people have higher savings
Conclusion
Preliminary results Men and literate people have
higher aspirations on our measure
Some effects of intervention detected beliefs about the causes of poverty savings, and use of saving accounts hypothetical loans but not our measures of aspirations
Further (more structural) analysis Expanding interest – Malawi,
Pakistan via IFPRI
Contributions
Research assistance: Fanaye Tadesse
Data cleaning: Fanaye Tadesse, Ibrahim Hassen
Survey management: Bezabih Tesfaye, Tewodros Abate
Administrative support: Mahlet Mekuria, Kate Prudden, CSAE staff, CARE facilitators
Pocket survey training and support: Felix Schmieding
Pocket survey support: Andrew Zeitlin, Justin Sandefur, Richard Payne, Naureen Karachiwalla
A very capable and willing team of enumerators
All participants
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