Centre for Development Economics
Department of Economics
Delhi School of Economics
ANNOUNCE A SEMINAR
Aspiring to a Better Future: Can a Simple Psychological Intervention Reduce Poverty?
by
Stefan Dercon (University of Oxford)
(Thursday,9 February 2023, 3:00 PM IST)
Venue: New seminar room
Abstract:-
How do material and psychological constraints individually and jointly affect investment and poverty? To answer this, we design a workshop teaching techniques to raise aspirations and encourage long-term planning. We cross-randomise this with large unconditional cash transfers in a 415-village, 8,300-person, 1.5-year experiment in Kenya. The workshop increases aspirations and investment, and raises living standards, at least twice as cost-effectively as cash transfers. But combining the workshop with cash produces similar effects to cash alone, potentially because cash raises aspirations. This shows that alleviating psychological constraints can improve economic outcomes but these constraints may relax when material conditions improve