We study asset collateralized loans for water tanks in Kenya. On replacing loans with high down payments and stringent guarantor requirements with the asset collateralized loans, the take-up of loans increased from 2.4% to 41.9% and we show that the loans had real impacts on households. A Karlan-Zinman test based on waiving borrowing requirements ex post finds evidence of adverse selection with lowered deposit requirements, but no evidence of moral hazard. A simple model and rough calibration suggests that adverse selection may deter lenders from making welfare-improving loans with lower deposit requirements, even after introducing asset collateralization.
Ahuja, Amrita, Sarah Baird, Joan Hamory Hicks, Michael Kremer, and Edward Miguel. 2017. “Economics of Mass Deworming Programs.” Disease Control Priorities: Child and Adolescent Health and Development 8: 413-422.
Scholars have long speculated about education’s political impacts, variously arguing that it promotes modern or pro-democratic attitudes; that it instills acceptance of existing authority; and that it empowers the disadvantaged to challenge authority. To avoid endogeneity bias, if schooling requires some willingness to accept authority, we assess the political and social impacts of a randomized girls’ merit scholarship incentive program in Kenya that raised test scores and secondary schooling. We find little evidence for modernization theory. Consistent with the empowerment view, young women in program schools were less likely to accept domestic violence. Moreover, the program increased objective political knowledge, and reduced acceptance of political authority. However, this rejection of the status quo did not translate into greater perceived political efficacy, community participation, or voting intentions. Instead, the perceived legitimacy of political violence increased. Reverse causality may help account for the view that education instills greater acceptance of authority.
We discuss how evidence and theory can be combined to provide insight on the appropriate subsidy level for health products, focusing on the specific case of deworming. Although intestinal worm infections can be treated using safe, low-cost drugs, some have challenged the view that mass school-based deworming should be a policy priority. We review well-identified research which both uses experimental or quasi-experimental methods to demonstrate causal relationships and adequately accounts for epidemiological externalities from deworming treatment, including studies of deworming campaigns in the Southern United States, Kenya, and Uganda. The existing evidence shows consistent positive impacts on school participation in the short run and on academic test scores, employment, and income in the long run, while suggesting that most parents will not pay for deworming treatment that is not fully subsidized. There is also evidence for a fiscal externality through higher future tax revenue, which may exceed the cost of the program. Our analysis suggests that the economic benefits of school-based deworming programs are likely to exceed their costs in places where worm infestations are endemic. This would likely be the case even if the benefits were only a fraction of estimates in the existing literature.