Early-Life Health and Adult Circumstance in Developing Countries

Early-Life Health and Adult Circumstance in Developing Countries

Janet Currie, Tom Vogl

NBER Working Paper No. 18371
Issued in September 2012
NBER Program(s):   AG   CH   HC   HE   LS

A growing literature documents the links between long-term outcomes and health in the fetal period, infancy, and early childhood. Much of this literature focuses on rich countries, but researchers are increasingly taking advantage of new sources of data and identification to study the long reach of childhood health in developing countries. Health in early life may be a more significant determinant of adult outcomes in these countries because health insults are more frequent, the capacity to remediate is more limited, and multiple shocks may interact. However, the underlying relationships may also be more difficult to measure, given significant mortality selection. We survey recent evidence on the adult correlates of early-life health and the long-term effects of shocks due to disease, famine, malnutrition, pollution, and war.

http://www.princeton.edu/~tvogl/currie_vogl_AR.pdf

New NBER Working Papers on Development and Behavioural Economics

The Behavioralist Goes to School: Leveraging Behavioral Economics to Improve Educational Performance
Steven D. Levitt, John A. List, Susanne Neckermann, Sally Sadoff

NBER Working Paper No. 18165
Issued in June 2012
NBER Program(s):   ED   PE

A long line of research on behavioral economics has established the importance of factors that are typically absent from the standard economic framework: reference dependent preferences, hyperbolic preferences, and the value placed on non-financial rewards. To date, these insights have had little impact on the way the educational system operates. Through a series of field experiments involving thousands of primary and secondary school students, we demonstrate the power of behavioral economics to influence educational performance. Several insights emerge. First, we find that incentives framed as losses have more robust effects than comparable incentives framed as gains. Second, we find that non-financial incentives are considerably more cost-effective than financial incentives for younger students, but were not effective with older students. Finally, and perhaps most importantly, consistent with hyperbolic discounting, all motivating power of the incentives vanishes when rewards are handed out with a delay. Since the rewards to educational investment virtually always come with a delay, our results suggest that the current set of incentives may lead to underinvestment. For policymakers, our findings imply that in the absence of immediate incentives, many students put forth low effort on standardized tests, which may create biases in measures of student ability, teacher value added, school quality, and achievement gaps. 

http://www.nber.org/papers/w18165.pdf

The European Origins of Economic Development
William Easterly, Ross Levine

NBER Working Paper No. 18162
Issued in June 2012
NBER Program(s):   EFG   POL

A large literature suggests that European settlement outside of Europe shaped institutional, educational, technological, cultural, and economic outcomes. This literature has had a serious gap: no direct measure of colonial European settlement. In this paper, we (1) construct a new database on the European share of the population during the early stages of colonization and (2) examine its impact on the level of economic development today. We find a remarkably strong impact of colonial European settlement on development. According to one illustrative exercise, 47 percent of average global development levels today are attributable to Europeans. One of our most surprising findings is the positive effect of even a small minority European population during the colonial period on per capita income today, contradicting traditional and recent views. There is some evidence for an institutional channel, but our findings are most consistent with human capital playing a central role in the way that colonial European settlement affects development today.

http://www.nber.org/papers/w18162.pdf

Randomized Controlled Trials or Structural Models (or both... or neither...)?

This weekend the Centre for the Study of African Economies (CSAE) at Oxford hosts their 25th annual conference. The plenary sessions will be broadcast live at http://www.csae.ox.ac.uk/conferences/2011-EdiA/video.html

Sunday 20 March 2011 14: 30- 16:00 GMT Panel Debate: Research, African Economic Policy and the Role of Private Business

Monday 21 March 2011 8:30 -9:30 GMT Assessing the Millennium Villages Program

Monday 21 March 2011 9:30-10:30 GMT Keynote speech on 'Education as Liberation?' by leading US academic Michael Kremer

And of particular interest is the following session featuring:

• Marcel Fafchamps, CSAE
• Glenn Harrison, Georgia State University
• David McKenzie, World Bank
• Leonard Wantchekon, New York University

Tuesday 22 March 2011 16:30-18:30 GMT Panel Debate: Randomized Controlled Trials or Structural Models (or both... or neither...)?

More Than Good Intentions

Dean Karlan has written some of the most highly-cited papers in the literature on randomised evaluation of development projects. His IDEAS page is here Along with his co-author Jacob Appel, he has written a book outlining the importance of rigorous design and evaluation of development projects. The website for the book is www.morethangoodintentions.org The book is an accesible and readable account of an extremely interesting literature applying randomised controlled trials in the context of development. Karlan has been particularly involved in behavioural trials that use both monetary incentives and various forms of reframing and commitment devices to influence behaviour. The book's strength is that it offers a very concise summary of a wide range of these types of trials in areas as diverse as promoting teacher attendance to encouraging efficient fertiliser use to sexual health interventions. Anyone working in the aid field should certainly read this book but I think it is also has a more general readership in terms of anyone involved in the design and evaluation of policies in any area, whether from the donor side, the evaluation side or the implementation side. We have covered the ongoing debate about the use of IV and RCT designs in development studies and it is worth keeping the wider debate in mind when reading this book but, overall, it provides a great summary of one of the most active areas of modern economics.

Portfolios of the Poor

I should open a category for late book recommendations, but better late than never. The book "Portfolios of the Poor" by Daryl Collins, Jonathan Morduch, Stuart Rutherford and Orlanda Ruthven is an important ommission from the blog so far. As described below, the book is a detailed description of the financial lives of people living in poverty, based on diary studies conducted in three countries.

Portfolios of the Poor: How the World's Poor Live on $2 a Day (Princeton University Press, 2009) tackles the fundamental question of how the poor make ends meet. Over 250 families in Bangladesh, India, and South Africa participated in this unprecedented study of the financial practices of the world's poor.

These households were interviewed every two weeks over the course of a year, reporting on their most minute financial transactions. This book shows that many poor people have surprisingly sophisticated financial lives, saving and borrowing with an eye to the future and creating complex "financial portfolios" of formal and informal tools.

Indispensable for those in development studies, economics, and microfinance, Portfolios of the Poor will appeal to anyone interested in knowing more about poverty and what can be done about it.

The book has seven chapters, along with some very interesting appendices detailing particular case-studies. Chapter 1 outlines the basic premise of the book and is very thought-provoking. As pointed out by the authors, figures outlining the amount of people living on average incomes of a dollar or two per day mask the fact that, for many of these people, there are days when they make money and days when they dont, so ensuring that they are able to smooth consumption through periods of no income is a critical task, not to mention saving for basic durables or cultural neccesities like funerals. I am tempted to paste great wads of text from the chapter up here but better to go and read it. Chapter 2 "The Daily Grind" examines income insecurity and the use of basic credit mechanisms to smooth consumption. Chapter 3 "Dealing with Risk" examines basic insurance and assurance mechanisms used by poor people. Chapter 4 "Building Blocks" examines savings among the poor. Chapter 5 "The Price of Money" examines the cost of various money mechanisms used by poor people. Chapter 6 "Rethinking Microfinance" examines microfinance mechanisms. Chapter 7 "Better Portfolios" outlines some ideas for improving the lives of poor people through better access to reliable financial instruments.

I haven't followed the literature on evaluating microfinance closely enough to assess the latter chapters but I found the bulk of this book very mind-opening and an excellent window into the lives of people on economic knife-edges going about the business of everyday life. Highly recommended book. The first chapter is available for free on their website and really worth reading.

Development Economics Summer School

If you are interested in development economics & could do with an intensive course in it, this course at U.Laval (Quebec) during the summer might just be the thing for you. And you get to have fun in Quebec.

Poor Economics Website

A lot of data tools and graphics on this website that will be of interest to people working on development economics topics. It is the companion website to the book "Poor Economics" by Banerji and Duflo.

Data visualization and development indicators

If you are interested in economic development, cross-country comparisons and data visualization this new facility from the World Bank is useful.

And to complete the toolkit a new stata module WBOPENDATA draws from the main World Bank collections of development indicators, compiled from officially-recognized international sources, and made available through the World Bank Open Data Initiative, and presents the most current and accurate global development data available, and includes national, regional and global estimates.
User's can download WBOPENDATA directly from within Stata by typing

ssc install wbopendata

Hat-tips to David Madden & Olivier Bargain respectively.

The bright side of life expectancy?

This is a nice graph which illustrates effectively the variation in male life expectancy: how many years a newborn baby boy can currently expect to live.
Actually, no, its a horrible graph because it shows that in many parts of the world, especially sub-Saharan Africa, people don't live much beyond 40, about half what we can expect in rich countries.
For the raw data & the graph for females see here.

Esther Duflo TED Talk

Esther Duflo, Bates Clarke Winner, gives a TED talk on the use of randomisation in development economics.

Washington Institute for Health Metrics and Evaluation Datasets

Students and researchers should keep a close eye on the evolving data infrastructure at the Institute for Health Metrics and Evaluation at University of Washington. The Maternal Mortality data page here is an example. Many of these data-sets were constructed for large scale evaluations of public health initiatives developed with a view to the Millenium Development Goals. They are very useful resources also for development economists and do not yet seem to have been widely used in this area. They are also, for the most part, downloadable for free in a "one-click" excel format. The growing publication list of this Institute is also worth looking at carefully.

Deaton - Instruments, Randomisation and Learning about Development

Instruments, randomization, and learning about development

Author info | Abstract | Publisher info | Download info | Related research | Statistics

Author Info

Angus Deaton (Princeton University)
Additional information is available for the following registered author(s):

• Angus S. Deaton

Abstract

There is currently much debate about the effectiveness of foreign aid and about what kind of projects can engender economic development. There is skepticism about the ability of econometric analysis to resolve these issues, or of development agencies to learn from their own experience. In response, there is increasing use in development economics of randomized controlled trials (RCTs) to accumulate credible knowledge of what works, without over-reliance on questionable theory or statistical methods. When RCTs are not possible, the proponents of these methods advocate quasi-randomization through instrumental variable (IV) techniques or natural experiments. I argue that many of these applications are unlikely to recover quantities that are useful for policy or understanding: two key issues are the misunderstanding of exogeneity, and the handling of heterogeneity. I illustrate from the literature on aid and growth. Actual randomization faces similar problems as does quasi-randomization, notwithstanding rhetoric to the contrary. I argue that experiments have no special ability to produce more credible knowledge than other methods, and that actual experiments are frequently subject to practical problems that undermine any claims to statistical or epistemic superiority. I illustrate using prominent experiments in development and elsewhere. As with IV methods, RCT-based evaluation of projects, without guidance from an understanding of underlying mechanisms, is unlikely to lead to scientific progress in the understanding of economic development. I welcome recent trends in development experimentation away from the evaluation of projects and towards the evaluation of theoretical mechanisms.

World Bank data

This week has provided free access to over 2000 data series

http://data.worldbank.org/

Global Public Health Databases

For those interested in some of the pressing public health issues in the developing world, it’s worth highlighting some of the recent work by The Institute for Health Metrics and Evaluation. According to their website the role of the IMHE is to “provide scientific evaluations of health system and health program performance in order to guide health policy and accelerate global health progress.”

They have made available online some very important datasets relating to a number of health indicators, which have much wider coverage than most other sources.

For example, a recent paper in the Lancet documents the progress made in reducing global maternal mortality in childbirth. The authors have compiled a database for 181 countries from 1980 to 2008, using available information from a wide variety of sources including surveys and vital statistics. They estimate there were a total of 342,900 such deaths in 2008, compared to 526,300 in 1980. Despite some progress, 80% of all deaths are concentrated in 21 countries. The bottom five comprises India, Nigeria, Pakistan, Afghanistan, and Ethiopia. An interesting case is Egypt which has seen an annual decrease of 8.4% between 1998 and 2008. In comparison to other developed nations, the US has performed poorly during this period.

Another paper, also published in the Lancet examines trends in the financing of public health expenditure in developing countries, and finds that there are important crowding out effects of development assistance for health.

The same team has done similarly valuable work building a global database for child mortality.

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.