Browsing by Author "Field, Erica"

This dissertation brings new causal evidence on three topics in development economics, economic demography, and political economy. In the first chapter, I study how aggregate income shocks affect the health and survival of children. I focus on the Peruvian coca industry to exploit a natural experiment. I assess the impacts of plausibly exogenous changes in the price of the coca crop on child mortality in coca-producing areas in a difference-in-difference framework. I find that child health is vulnerable to income losses. In the second chapter, I study how exposure to mass media affect household choices. In particular, I analyze the impacts of exposure to commercial television on fertility in the 1950s in the United States. I tackle this question empirically by exploiting variation in the introduction of television across time and space. I find that television is associated with fewer births. Finally, in the third chapter, I study the consequences of electing low-quality politicians to public office for the provision of public goods. I evaluate the impacts of electing criminal politicians in Peru using a regression-discontinuity design. The analysis suggests that electing a criminal politician is associated with increases in public expending; however, I show that pre-existing levels of expenditure drive these effects.

This thesis focuses on multiple themes in the field of public economics with intersectionsin development economics, environmental economics, and political economy. The overarching themes of this work are focuses on the city, institutions, and economic and environmental justice. The first chapter examines on the impact of lead abatement laws on eviction. The second chapter evaluates Myanmar’s National Community Driven Development Program. The final chapter examines the role of one’s representative on their home’s price. An abstract of each chapter is as follows:

Lead paint in old houses is the leading cause of leadpoisoning in children under 6 today. To combat this problem, several states have passed lead abatement laws, forcing landlords to remove lead in the homes they rent if tenants have children under the age of 6. However, these laws have unintended consequences, causing landlords to evict tenants rather than abate lead. I use a difference-in-differences approach while employing various model specifications with various fixed effects and sets of controls to examine the impact of Ohio’s 2003 lead abatement law on eviction rates. Using newly collected data from the Eviction Lab at Princeton University, I find that the passage of Ohio’s lead abatement law sharply increased targeted evictions. Due to the law’s passage, the average census district in Ohio faced an increased eviction rate of roughly 0.457 points, corresponding to an additional 13.93 evictions a year. These impacts are highly statistically significant, sizeable, and economically meaningful, indicating that policy makers should incorporate distributional consequences when designing future lead abatement laws in order to avoid unintended consequences and ensure equitable outcomes.

Community driven development (CDD) has become acommon method of distributing aid throughout the developing world. Founded on two guiding principles, decentralization of the aid distribution process and empowerment through participation, CDD programs encourage community involvement in all steps of the development project. We evaluate Myanmar’s National Community Driven Development Program (NCDDP) by implementing a regression discontinuity design in sampling that takes advantage of the discontinuous cutoff in program receipt at the township border by sampling matched pairs of villages across program borders. We find that CDD successfully delivers village infrastructure, in line with the results of previous CDD evaluations. Moreover, in contrast to previous findings in the literature, we find large positive effects of CDD enrollment on the diversity and quality of local governance structures and greater participation of women and ethnic minorities. Finally, we provide novel evidence that these changes in local governance are associated with detectable improvements in local public goods provision beyond the scope of the CDD program, as measured by village-level responses to the Covid-19 pandemic. In particular, CDD villages enact more significantly more of the recommended measures to contain the spread of disease. These results provide evidence that CDD participation Congressional and state representatives and their parties use their political power to send kickbacks to their districts, providing funding for public goods and targeted investment within their district. However, representatives do not have an equal ability to do this, as those with longer tenure, important committee posts, and in more competitive districts have the ability to send more kickbacks to their districts. I estimate the impact of one's representative and district, at the state house, state senate, and congressional level, on housing prices using the 2010 redistricting to identify the impact of one's representative on housing prices. I first develop a model of political competition and housing prices with testable implications to bring to the data. Using data from InfoUSA, containing roughly 130 million housing transactions per year, from 2006 to 2014, combined with data on state and federal representatives, I identify and examine the impact of one's representative on housing prices using multiple methods, including location fixed effects, a regression discontinuity design, and an instrumental variables design. I find that "packing" districts so that they are not competitive is not only used to dilute voting power, but dilute local wealth as well, that more powerful representatives use that power to increase the value of their constituents' homes, and that representatives in the party in control of the respective house are able to use this power to send kickbacks to their constituents. Not only does partisan gerrymandering come at a social and political cost, but a great economic cost as well.

Economic risks of many sorts are prevalent in developing countries. In this dissertation I exploit rainfall variation, a particularly prominent form of risk, to study three related topics in development economics. Because many households in developing countries still depend in large part on agriculture for their livelihood, variation in rainfall provides a natural experiment to study topics related to local economic shocks.

In the first chapter, I provide evidence on how economic shocks that occur during school age can have long-term negative consequences on adult well-being. Using data from a large household survey in Indonesia, I link a sample of adults to rainfall that they experienced many years ago during school age. I find that both low and high levels of rainfall during school age lead to permanent decreases in completed schooling and adult earnings. I then provide evidence on the mechanisms behind these results, showing that the impact of low rainfall is driven by an income effect, whereas the impact of high rainfall is driven by a labor substitution effect.

In the second chapter, I use rainfall variation as an instrumental variable for school attainment in order to provide a new estimate for the returns to schooling in a developing setting. In chapter one I showed that both low and high rainfall during school age lead to permanently decreased schooling and earnings. In chapter two, I link these findings by estimating the implied returns to schooling. The instrumental variables estimation yields a 25 percent return per year of additional schooling. A serious concern, though, is that the exclusion restriction may not hold. In other words, rainfall may affect earnings through channels other than years of schooling. Thus, in this chapter I also employ a novel method to account for violation of the exclusion restriction, which leads to a substantially different estimate of the returns to schooling.

Finally, in the third chapter I study whether a large microfinance initiative in Thailand was able to help households cope with the effects of rainfall variation. Much of the previous microfinance literature has focused on its potential to aid household business entrepreneurship. Another potential benefit is that it could help households cope with economic shocks if they are able to borrow in response. Using household-level data from 7 rounds of a panel survey in rural Thailand, I find that consumption levels strongly decrease in response to low rainfall. However, at the average level of borrowing from the microfinance program, the negative impact on consumption is completely mitigated. Furthermore, I show these findings do not seem to be driven by changes in household composition, changes in prices of consumption goods, or household attrition from the survey.

The project is composed by three essays in development economics. All of them use applied microeconometric methods to pin down policy recommendations that help households and firms in developing countries to take advantage of available opportunities. The first two chapters aim to contribute in the understanding of the welfare implications of gaining access to financial services. First, I show that when Mexican low income household get access to formal credit, they reduce their participation in their social networks. They are less likely to receive money from their peers, even when they have been exposed to a negative idiosyncratic income shock. Results suggest that policies promoting universal access to financial services should be accompanied by an extension of the public safety net. Second, in the context of urban India, I show exploit a unique setting to show that access to microfinance might be an effective tool to overcome the social and cultural barriers that prevent women to participate in the labor force. The third project focus on understanding the efficiency gains coming from using long-term commercial relationships to sustain informal agreements. I study this in the context of the Peruvian anchovy fishery, in which small firms have no access to formal tools to coordinate their actions with buyers. First, I provide evidence that in a context of highly variable supply conditions, commercial partners draw upon relational contracts to effectively exchange supply and demand assurance. Next, I show that the use of these informal agreements imposes positive net externalities on those agents operating without them. Results suggest that the fraction of transactions mediated by relational contracts is privately but not socially efficient.

Health and education are important determinants of economic success and general wellbeing both at the individual and macro levels. Yet individuals often do not appear to invest in these forms of human capital at levels commensurate with their importance. This is especially true in developing countries such as Bangladesh. This dissertation investigates interventions that have been taken to increase investment in health at the household level and education at the student level using the randomized controlled trial (RCT) design and presents simulations and recommendations for future RCTs. An intervention designed to change students’ beliefs about the malleability of their own intelligence is shown to be a cost-effective tool for increasing learning. A novel intervention for handwashing is shown to be effective, while other novel methods backed by theory such as chlorine dispensers and disgust-based behavior change messaging are not. An optimal algorithm for assigning subjects to treatment that was developed by Atkinson (1982) is coded, field tested and simulations are provided to show the practically significant gains it can provide.

This dissertation explores three topics covering the economics of crime and political economy within the field of development economics. In the first research chapter, I explore how the number of criminal organizations impacts homicides and school dropout. To do so, I the number and locations of large Drug Trafficking Organizations (DTOs) in Mexico. I use instrumental variables in a selection model which models DTO entry. The instruments are based on the distance to DTOs' existing networks. I find more DTOs increase homicides and school dropout. Furthermore the pattern of results suggest more DTOs cause more students to dropout via an opportunity cost channel, with students leaving school to join criminal activities.

The second research chapter examines the important of transport costs for DTOs within Mexico. DTOs in Mexico engage in a wide variety of activities, including producing drugs within Mexico using illicit crops grown in Mexico. Here, I explore whether or not lower transport costs for these illicit inputs results in more crime. I use variation in travel times induced by landslides to identify the effects of lower transport costs in a panel data setting. I find that lower transport costs increase homicides, while it reduces robberies in areas more likely to be involved in the drug trade.

The final chapter focuses on political economy. This chapter, co-authored with Kate Vyborny and Sadia Hussain, examines political favoritism in public procurement programs. Government procurement programs represents a significant share of output worldwide, however, these public procurement programs have high potential for corruption and political capture. We study political favoritism in the context of government procurement of wheat from farmers in Punjab, Pakistan. Using a panel fixed effects approach, we show that wheat procurement increases in governing party constituencies when the government procurement price is high relative to world prices.

This thesis aims towards contributing to the understanding of the role of social networks in the context of developing countries. It contains two chapters that take on different aspects of social networks.

In the first chapter, I study a specific characteristic of social networks, network structure, which is the way in which households are connected in a social network. This chapter looks at how social networks help facilitate cooperation among people in the community, at least, in the context of contributing to public goods. Public goods in this case refer to shared infrastructure in rural villages such as community buildings, water wells, and roads. Provision and maintenance of these public goods relies on contribution of people within the vilage and therefore is essentially a problem of voluntary collective action. In particular, I study whether the level of network connectedness of a household (as measured by network centrality) affects its decisions to contribute to public goods, using data from the Gambia. As an identification strategy, I use an instrumental variable approach that exploits the arguably exogenous variation in village ethnic composition, largely determined by historical accident. The findings suggest that better-connected households contribute more to some public goods. The network position effect is smaller when using a centrality measure that accounts for indirectly connected households. This paper also offers networks as a potential mechanism that explains the long-established relationship between ethnic diversity and public goods.

The second chapter (co-authored with Alessandro Tarozzi and Aprajit Mahajan) looks on a different aspect of social networks. In this chapter, we describe evidence of limited diffusion of bednet acquisition and usage from beneficiaries of an ITN distribution program in rural Orissa, India, to households that did not receive bednets during the intervention. Identification of such network effects relies on the change in ITN adoption among the beneficiaries of a program of bednet distribution that was carried out in a randomly selected subset of 141 study villages. This field experiment was designed to increase the adoption rate of insecticide-treated bed-nets to protect against malaria. The program randomly assigned 141 sample villages into 3 experimental arms - a group in which some households received free distribution of bed-nets, a group in which micro loans for bed-nets were made available, and finally a control group with no intervention. In this paper, we focus on the impact of the intervention on households who lived in these respective groups of villages but did not receive the intervention. Our sample households include those that were exposed to the program via interactions with treated households. Identification is possible by exploiting the exogenous variation from the randomized controlled trials. We find that there is a small positive association between the number of social connections with treated households and their bed nets usage. On average, spillovers were limited. However, we find that bednet usage (but not acquisition) was substantively and significantly associated with some (but not all) measures of social links between non-beneficiaries and beneficiaries. This provides evidence, although limited, of network effects in the adoption of a health-related technology possibly due to diffusion of information and peer imitation.

The dissertation explores the microeconomics of health in developing countries, focusing on the critical role that improving global health has in achieving economic development. First, I explore the political economy of health epidemics. Taking as example the 2014 West Africa Ebola Outbreak in Liberia, I study how political motives drive the allocation of public resources, and how the misallocation of these resources is costly for citizens’ welfare. Second, I explore how booms in natural resources benefit or harm the health of local communities. In the context of minerals’ production in Brazil, I study the mechanisms of the impacts on birth outcomes, in light of the standard trade-off between the benefits - more wealth from taxes and job opportunities - and costs - corruption or pollution - of natural resources. Third, I explore individual health-seeking behavior. As part of a larger randomized controlled trial which studies how targeted subsidies for antimalarial drugs (to positive individuals) can improve adherence to malaria testing in Kenya, I investigate whether beliefs play a role in explaining how individuals decide to test and treat for malaria.