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We conduct an artefactual field experiment in endogenously formed groups in rural Malawi to investigate social influence in risk taking. Treatments vary whether individuals observe the behavior of a formally elected leader, an external leader, or a random peer. Results show social influence in risk taking with differential influence by leader type. The decisions made by peers are most influential, followed by those made by formal leaders, and then external leaders. Exploratory analysis suggests that participants follow peers because they extract information from their choices and share risks with them; while other forms of social utility are gained from following the example of leaders.

Though the differential impacts of earned and unearned income have long been of interest to economists and policymakers, the study of this question is often conflated by other differences between the income streams. We conduct a field experiment in Malawi in which we examine the differential short-term effect of earned and unearned income on the allocation of expenditures and labor supply, holding all other factors constant. All participants receive an equal size cash payment and make the same time investment; half are required to work, and half are not. Our main finding is that the work requirement results in a reallocation of labor supply away from household work in the very short term. Conversely, there is no evidence that the allocation of expenditures across categories is affected.

Labor earnings are critical to exiting poverty; thus, understanding the returns to the determinants of wage growth is important. We examine one important driver of wage growth: acquired wor...

This study analyzes impacts of large, one-time cash transfers and farm management plans among farmers in Senegal. Farmers were randomized into groups receiving advisory visits; the visits and an individualized farm management plan; or the visits, the plan, and a cash transfer. After one year, crop production and livestock ownership were higher in the transfer group relative to the group that only received visits. Livestock gains persisted after two years. The evidence suggests the results were driven by increased investment, and, indeed, there is no robust evidence that the management plans alone affected agricultural outcomes.

Financial market imperfections remain pervasive in developing countries, constraining potentially profitable investment decisions, especially for rural smallholder farmers. Warrantage is an innovative model of rural finance with the potential to overcome credit, storage, and commitment constraints through a localized inventory credit scheme. Exploiting random variations in household access to warrantage and intensity of access across villages, this paper studies the direct impact of this scheme on beneficiaries as well as its spillover effects. Take-up of storage is high (94 percent), while credit take-up is moderate (38 percent). Households with access to warrantage primarily store sorghum and maize and sell their production over an extended period of time, earning higher average prices and resulting in higher sales revenue ($248, or 33 percent, on average). Increased incomes are spent on long-term investments, including human capital expenditures (education), livestock purchases, and investment in agricultural inputs for the subsequent year.

Self-reported retrospective survey data is widely used in empirical work but may be subject to cognitive biases, even over relatively short recall periods. This paper examines the role of anchoring bias in self-reports of objective and subjective outcomes under recall. We use a unique panel-survey dataset of smallholder farmers from four countries in Central America collected over a period of three years. We exploit differences between recalled and concurrent responses to quantify the degree of mental anchoring in survey recall data. We assess whether respondents use their reported value for the most recent period as a cognitive heuristic when recalling the value from a previous period, while controlling for the value they reported earlier. The results show strong evidence of sizeable anchoring bias in self-reported retrospective indicators for both objective measures (income, wages, and working hours) and subjective measures (reports of happiness, health, stress, and well-being). We also generally observe a larger bias in response to negative changes for objective indicators and a larger bias in response to positive changes for subjective indicators.

This article measures farm-level postharvest losses for maize, soya and groundnuts among 1,200 households in Malawi. Farmers answered a detailed questionnaire designed to learn about losses during harvest and transport, processing and storage and which measures both complete losses and crop damage. The findings indicate that fewer than half of households report suffering losses conditional on growing each crop. Conditional on losses occurring, the loss averages between 5 and 12 per cent of the farmer's total harvest. Compared to nationally representative data that measure losses using a single survey question, this study documents a far greater percentage of farmers experiencing losses. We find that losses are concentrated in harvest and processing activities for groundnuts and maize; for soya, they are highest during processing. Existing interventions have primarily targeted storage activities; however, these results suggest that targeting other activities may be worthwhile.

Objective The benefit of male circumcision is greatest among men who are most at risk of HIV infection. Encouraging this population of men to get circumcised maximizes the benefit that can be achieved through the scale-up of circumcision programs. This paper examines how the price of circumcision affects the risk profile of men who receive a voluntary medical circumcision. Methods In 2010, 1649 uncircumcised adult men in urban Malawi were interviewed and provided a voucher for a subsidized voluntary medical male circumcision, at randomly assigned prices. Clinical data were collected indicating whether the men in the study received a circumcision. Results Men who took-up circumcision with a zero-priced voucher were 25 percentage points less likely than those who took-up with a positive-price voucher, to be from a tribe that traditionally circumcises (p = 0.101). Zero-priced vouchers also brought in men with more sexual partners in the past year (p = 0.075) and past month (p = 0.003). None of the men who were most at risk of HIV at baseline (those with multiple partners and who did not use a condom the last time they had sex) received a circumcision if they were offered a positive-priced voucher. Lowering the price to zero increased circumcision take-up to 25% for men of this risk group. The effect of price on take-up was largest among those at highest risk (p = 0.096). Conclusions Reducing the price of circumcision surgery to zero can increase take-up among those who are most at risk of HIV infection.

Understanding behavioral responses to changes in actual or perceived risk is important because risk-reduction goals can be undermined by risk-compensating behavior. This paper examines the response to new information about the risk of HIV infection. Approximately 1,200 circumcised and uncircumcised men in rural Malawi are randomly informed that male circumcision reduces the HIV transmission rate, predicting asymmetric behavioral responses. We find no evidence that the information induces circumcised men to engage in riskier sex while uncircumcised men practice safer sex in response to the information. There were no significant effects of the information on child circumcisions after one year.

A major goal of social protection programs run by governments and NGOs in the developing world is to provide income support to individual and households living in poverty. These programs tend to be split between cash transfer programs that provide cash to families with no conditions, and public works programs that require participants to work in order to receive the cash payments. Despite the widespread nature of both types of programs, and large literatures that examine their impacts, there exists little work directly comparing them. Such a comparison would be useful to policy makers considering whether a cash transfer or public works program better meets their goals.

Informal health providers ranging from drug vendors to traditional healers account for a large fraction of health care provision in developing countries. They are, however, largely unlicensed and unregulated leading to concern that they provide ineffective and, in some cases, even harmful care. A new and controversial policy tool that has been proposed to alter household health seeking behavior is an outright ban on these informal providers. The theoretical effects of such a ban are ambiguous. In this paper, we study the effect of a ban on informal (traditional) birth attendants imposed by the Malawi government in 2007. To measure the effect of the ban, we use a difference-in-difference strategy exploiting variation across time and space in the intensity of exposure to the ban. Our most conservative estimates suggest that the ban decreased use of traditional attendants by about 15 percentage points. Approximately three quarters of this decline can be attributed to an increase in use of the formal sector and the remainder is accounted for by an increase in relative/friend-attended births. Despite the rather large shift from the informal to the formal sector, we do not find any evidence of a statistically significant reduction in newborn mortality on average. The results are robust to a triple difference specification using young children as a control group. We examine several explanations for this result and find evidence consistent with quality of formal care acting as a constraint on improvements in newborn health.

Prevalence of HIV in sub-Saharan African countries persists at alarming rates. There are currently four promoted methods to prevent HIV infection: adherence to antiretroviral therapy, male circumcision, pre-exposure prophylaxis and use of condoms. This study aimed to assess the availability and accessibility of one of the prevention efforts, condoms, in Kawale, Lilongwe, Malawi. A total of 220 potential condom-selling establishments were surveyed in 2012. Data were collected with store owners or staff and locations were geocoded to assess store density. Descriptive analyses were conducted. Of those audited, 96 stores sold condoms, 13 of which distributed free condoms. The stores were most often small shops and located in markets or trading centres. Condoms were most often found at the back of the store in an open space. There were approximately 1.2 stores per ¼ mile; 44% of the businesses in the study region carried condoms. This one method of prevention exhibited multiple barriers in this region: few stores sold condoms, high costs, condom locations within stores and limited availability. The limited accessibility is likely to influence social norms surrounding condom use. Future research should incorporate assessing norms and addressing barriers to uptake of HIV prevention efforts.

Can pro-social preferences lead to dishonest or unethical behavior? Lab evidence suggests that it can. In this paper, we document some of the first field evidence of this phenomenon. In this study, individuals were hired as field staff and tasked with distributing subsidized price vouchers following a clearly specified protocol. We find substantial deviation from the protocol, i.e., cheating. We study the mis-allocation of the vouchers to gain some insight into motivations for dishonesty. In our main result we find that the field staff were significantly more likely to allocate the higher value vouchers (those representing a greater subsidy) to the poorest beneficiaries. While we are not able to definitively establish the motivations for this observed pro-social behavior, we argue that this result is consistent with a model of social preferences and less consistent with a pure self-interest motive.

Qualitative studies and polling data from sub-Saharan Africa indicate that many individuals may mistakenly believe that male circumcision directly protects women from contracting HIV. This study examines whether individuals who learn that male circumcision reduces female-to-male HIV transmission also erroneously infer a reduction in direct male-to-female transmission risk (i.e. from an HIV-positive man to an uninfected woman). We used data on Malawian men (n = 917) randomized to receive information about voluntary medical male circumcision (VMMC) and HIV risk in 2008 and a random sample of their wives (n = 418). We found that 72 % of men and 82 % of women who believed that male circumcision reduces HIV risk for men also believed that it reduces HIV risk for women. Regression analyses indicated that men randomly assigned to receive information about the protective benefits of circumcision were more likely to adopt the erroneous beliefs, and that the underlying mechanism was the formation of the belief that male circumcision reduces HIV risk for men. The results suggest the need for VMMC campaigns to make explicit that male circumcision does not directly protect women from HIV-infection.

This paper measures the demand for adult medical male circumcision using an experiment that randomly offered varying-priced subsidies and comprehensive information to 1,600 uncircumcised men in urban Malawi. We find low demand for male circumcision: only 3 percent are circumcised over a three month period. Despite the low overall level of take-up, both price and information are significant determinants of circumcision. Still, the main barriers to male circumcision—cultural norms and fear of pain—are not affected by prices or information. Significant demand generation efforts are needed for this HIV prevention strategy to be effective. (JEL I11, I18, O15, Z13)

Extending the seminal work of von Neumann and Morgenstern (1944), Savage (1954) advanced a theory that allows decision makers to maximize expected utility based on subjective probabilities of different states when objective probabilities are unknown. Since then, an extensive theoretical and empirical literature has explored how beliefs are formed or updated and how they affect behavior (Dominitz and Manski 1997; Manski 2004). One line of research has studied subjective beliefs in the context of testing and learning results for a variety of health conditions such as Huntington’s disease, cervical cancer, and breast cancer (Oster, Shoulson, and Dorsey 2013; Okeke, Adepiti, and Ajenifuja 2013; and Lange 2011, among others). In this context, receiving a diagnosis provides objective information that individuals can use to make decisions, optimizing for the future. In contrast to noncommunicable diseases, some diseases such as HIV, allow for behavioral responses to testing that can affect the spread of the disease. In this paper we examine how beliefs and behavior are affected by HIV testing in rural Malawi. We extend the existing literature by studying the impact of others’ testing on

How do neighbors positively or negatively influence individuals living in rural Malawi to learn their HIV results? Using data of location of homes and distance to neighbors, we measure the social network effects of neighbors’ learning their HIV results on individuals own learning. Using the fact that neighbors were randomly offered monetary incentives of varying amounts to learn their HIV results, we find positive effects of neighbors attending clinics on others living nearby: a 10 percentage point increase of the percentage of neighbors (approximately 2.4 individuals) learning their HIV results increases the probability of learning HIV results by 1.1 percentage points. The strongest network effects are among closest neighbors; we find no effect among religious social networks. We also find a negative interaction between direct cash incentives and peers: the effect of peers doubles among those who were not offered any individual financial incentive to learn their HIV results.

Social networks are increasingly being recognized as having an important influence on labour market outcomes, since they facilitate the exchange of job related information. Access to information about job opportunities as well as perceptions about the buoyancy of the labour market depend critically on the social structures and the social networks to which labour market participants belong. In this paper, we examine the impact of information externalities generated through network membership on labour market status. Using Census data from South Africa, a country characterized by high levels of unemployment and worker discouragement, we adopt an econometric approach that aims to minimise the problems of omitted variable bias that have plagued many previous studies of the impact of social networks. Our results suggest that social networks may enhance employment probabilities by an additional 3–12%, and that failure to adequately control for omitted variables would lead to substantial over-estimates of the network co-efficient. In contrast, the impact of social networks on reducing worker discouragement is much smaller, at between 1 and 2%.

This paper examines the impact of health status on poverty status, accounting for the endogeneity of health status. Using exogenous measures of health status from the South African Integrated Health Survey, we instrument for health status while allowing for covariation among the unobservables influencing both health and household poverty status. Health status, as captured by the body mass index, is shown to strongly influence poverty status. Households that contain more unhealthy individuals are 60 per cent more likely to be income poor than households that contain fewer unhealthy individuals, and this finding appears invariant to the choice of poverty line.

High levels of job uncertainty in developing countries may have significant implications for job performance. This paper examines the relationship between employment risk and job-seeker performance. To induce exogenous variation in employment risk, the outside options for job seekers undergoing a real recruitment process were randomized by assigning them a 0, 1, 5, 50, 75, or 100 percent chance of real alternative employment of the same duration and wage as the jobs for which they were applying. The findings show that job-seeker performance is highest and effort is lowest among those assigned the lowest employment risk (a guaranteed alternative job), and performance is lowest and effort highest among those facing the highest employment risk (those without any job guarantee). Moreover, a nonlinear relationship exists between employment risk and performance.The findings are consistent with a framework that ties together insights from economics and psychology — that is, performance is an increasing function of effort and an inverse U-shaped function of stress. The results are not driven by gift exchange, stereotype threat, or the nutritional efficiency wage hypothesis.These performance improvements have significant welfare implications. In this study, job seekers assigned a high probability of receiving an outside option were twice as likely to be hired in the standard job recruitment process compared with those assigned a low probability of receiving an outside option. More broadly, these results suggest that stress-induced performance reductions are a potential mechanism through which exposure to high employment risk can perpetuate poverty and unemployment.

Voluntary medical male circumcision (VMMC) is being suggested as an essential HIV prevention strategy in high-prevalence areas. These analyses reflect data collected from 360 married couples, 50% of which included a circumcised husband and the other 50% uncircumcised, in rural Malawi. Regardless of their circumcision status, men were more likely to perceive that being circumcised was less painful than having a tooth pulled, giving birth, and having malaria. Men reported having the same sexual pleasure regardless of the circumcision status, while women were 2.0 times more likely to report greater sexual pleasure with a circumcised partner. Participants identified the medical benefits of VMMC and highlighted the potential personal benefits of VMMC. As VMMC has become a promising method of HIV prevention, this study revealed opportunities for intervention development to increase rates of VMMC among men.

Objective: To examine whether individuals who learn that voluntary medical male circumcision (VMMC) partially reduces female-to-male HIV transmission erroneously infer a reduction in male-to-female HIV transmission risk. Design: Cluster randomised controlled trial. Methods: In 2008, information that VMMC reduces female-to-male HIV transmission risk was randomly disseminated to men in rural Malawi, with follow-up in 2009 (n=917). Data was collected on perceived male and female HIV-transmission risks. We assessed whether beliefs about male circumcision and female HIV-risk varied by receipt of VMMC information and by whether or not individuals believed that VMMC partially protects men from HIV-infection. Results: Men informed about VMMC were more likely to believe that sex with a circumcised male would confer lower transmission risk for women vis-à-vis sex with an uncircumcised male (38% versus 50%, p0.01). Multivariate regression analyses showed that incorrect inferences were most likely to be made by those who believed that circumcised men were partially protected from contracting HIV. Consistent with this, instrumental variable analyses indicated that those individuals who received information about VMMC, and consequently believed it, were 82 percentage points more likely to believe that male circumcision also protects women (p0.01). The inferred reduction in direct HIV infection risk for women due to male circumcision was approximately 50%. Conclusions: Our results suggest the need for VMMC campaigns to make explicit that male circumcision does not directly protect women from HIV-infection. It is also important to assess whether incorrect inferences lead to updated self-perceived HIV-risk and the adoption of riskier sexual behaviours.

Background Incorrect inferences drawn from large-scale HIV prevention messages may hinder their efficacy. We examined whether individuals who are told that medical male circumcision (MMC) partially reduces female-to-male HIV transmission also erroneously infer a reduction in male-to-female HIV transmission risk. Methods In 2008, nearly 1,000 men in rural Malawi were randomised to receive the information that MMC reduces female-to-male HIV transmission risk, with follow-up in 2009. Data was collected on perceived HIV transmission risks faced by men and women by the circumcision status of the male partner. Descriptive and multivariate variable regression analyses were used to assess whether beliefs about male circumcision and female HIV risk varied by receipt of information about MMC and by whether individuals believed that that MMC partially protects men from HIV infection. Results Men randomised to information about MMC were more likely to believe that circumcised men faced reduced HIV transmission risks relative to uncircumcised men (50% versus 65%, p Conclusions Our results point toward the need for male circumcision campaigns to make explicit that male circumcision does not directly protect women from HIV infection.