Saturday, July 25, 2009

Behavioural Economics and Development Economics

I promised a few PhD students working on development economics that I would provide some details of papers and researchers at the interface of behavioural economics and development economics. What follows is very incomplete so please feel free to add some more if you know of them. The intersection raises a whole host of questions about theory, empirical research and policy and it would be worth talking about it more given that there are a number of projects here in both fields.

The Economist article "international bright young things" gives a good overview of some top class researchers at this interface

The paper by Angus Deaton that has been discussed here substantial "Randomisation in the Tropics" is a mind-blowingly interesting perspective from one of the world's leading economists, which concludes with optimism about the potential for integrating behavioural insights into bridging between structural models and empirical RCT and IV work

The MIT Poverty Lab and associated researchers including Esther Duflo (see e.g. link), and Abhijit Banerjee evaluate a substantial body of development RCT's that are increasingly being informed by behavioural economics.

Sendhil Mullainthan is conducting some of the most high-profile work at the intersection of these fields. See "Development Economics through the lense of Psychology" for an overview of some of the issues.


Rob Gillanders said...

Cheers captain.

devmag said...

Maybe another interesting paper is Microfinance Games by Gine et al (2005) - They run field experiments in Peru with microfinance customers. In their conclusions they actually touch the field of behavioral economics by advocation Fehr's theory of inequity aversion as a potential explanation of irrational behavior in games.