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"Khandker, Shahidur R"
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The Poverty Impact of Rural Roads: Evidence from Bangladesh
A rationale for public investment in rural roads is that households can better exploit agricultural and nonagricultural opportunities to employ labor and capital more efficiently. Significant knowledge gaps persist, however, as to how opportunities provided by roads actually filter back into household outcomes as well as distributional consequences. This study examines the impacts of two rural road-paving projects in Bangladesh using a new quasi-experimental household panel data set surveying project and control villages before and after program implementation. A household panel fixed-effects methodology controlling for initial area conditions is used to estimate the impact of paved roads on household and individual outcomes and account for potential bias in program placement at the village level. Rural road investments are found to reduce poverty significantly through higher agricultural production, lower input and transportation costs, and higher agricultural output prices at local village markets. Rural road development has also led to higher secondary schooling enrollment for boys and girls, as compared to primary school enrollment. We find that road investments have also benefited the poor, meaning the gains are significant for the poor and in some cases disproportionately higher than for the nonpoor.
Journal Article
Welfare impacts of rural electrification
Most past studies on the development impact of rural electrification have relied on cross-sectional surveys comparing households with and without electricity. This study tests the validity of the perceived correlation between welfare outcomes and rural electrification and quantifies electricity’s benefits on the basis of sound econometric techniques that control for endogeneity bias. The study used panel surveys conducted in rural Vietnam in 2002 and 2005, covering some 1,120 households in 41 communes; by 2005, all surveyed communes had connected to the grid, and four-fifths of their households had a connection. The econometric estimations suggest grid electrification’s positive effects on both household income and expenditure and education. We find differential returns to electricity for commune- and household-level connection: the former generates externality benefiting the poor more than the rich, farm more than nonfarm income, and girls over boys for schooling outcome; conversely, the latter benefits the rich more than the poor, nonfarm more than farm income, and boys over girls for schooling outcome. We recommend further study on rural electrification’s long-term benefits for the overall rural economy.
Journal Article
Who Benefits Most from Rural Electrification? Evidence in India
This paper applies an econometric analysis to estimate the average and distribution benefits of rural electrification using rich household survey data from India. The results support that rural electrification helps reduce time allocated to fuel wood collection by household members and increases time allocated to studying by boys and girls. Rural electrification also increases labor supply of men and women, schooling of boys and girls, household per capita income and expenditure. Electrification also helps reduce poverty. But the larger share of benefits accrues to wealthier rural households, with poorer ones having a more limited use of electricity. The analysis also shows that restricted supply of electricity, due to frequent power outages, negatively affects both household electricity connection and its consumption, thereby reducing the expected benefits of rural electrification.
Journal Article
Estimating the Effects of Credit Constraints on Productivity of Peruvian Agriculture
This paper proposes an estimator for the endogenous switching regression models with fixed effects. The decision to switch from one regime to the other may depend on unobserved factors, which would cause the state, such as being credit constrained, to be endogenous. Our estimator allows for this endogenous selection and for conditional heteroscedasticity in the outcome equation. Applying our estimator to a dataset on the productivity in agriculture substantially changes the conclusions compared to earlier analysis of the same dataset. Intuitively, the reason that our estimate of the impact of switching between states is smaller than previously estimated is that we captured the selection issue: switching between being credit constrained and credit unconstrained may be endogenous to farm production. In particular, we find that being credit constant has the substantial effect of reducing yield by 11%, but not the previously estimated very dramatic effect of reducing yield by 26%.
Journal Article
Empowering Women with Micro Finance: Evidence from Bangladesh
This article examines the effects of men’s and women’s participation in micro credit programs on various indicators of women’s empowerment using data from a special survey carried out in rural Bangladesh. These credit programs are well suited to studying how gender‐specific resources alter intrahousehold allocations because they induce differential participation by gender through the requirement that only one adult member per household can participate in any micro credit program. Empowerment is formalized as an unobserved latent variable reflecting common components of qualitative responses to a large set of questions pertaining to women’s autonomy and decision‐making power. The empirical methods are attentive to various sources of endogeneity, and the results are consistent with the view that women’s participation in micro credit programs helps to increase women’s empowerment. The effects of male credit on women’s empowerment were generally negative.
Journal Article
The impact of Group‐Based Credit Programs on Poor Households in Bangladesh: Does the Gender of Participants Matter?
This paper estimates the impact of participation, by gender, in the Grameen Bank and two other group‐based micro credit programs in Bangladesh on labor supply, schooling, household expenditure, and assets. The empirical method uses a quasi‐experimental survey design to correct for the bias from unobserved individual and village‐level heterogencity. We find that program credit has a larger effect on the behavior of poor households in Bangladesh when women are the program participants. For Example, annual household consumption expenditure increases 18 taka for every 100 additional taka borrowed by women from these credit programs, compared with 11 taka for men.
Journal Article
Microfinance and Poverty: Evidence Using Panel Data from Bangladesh
Microfinance supports mainly informal activities that often have a low return and low market demand. It may therefore be hypothesized that the aggregate poverty impact of microfinance is modest or even nonexistent. If true, the poverty impact of microfinance observed at the participant level represents either income redistribution or short-run income generation from the microfinance intervention. This article examines the effects of microfinance on poverty reduction at both the participant and the aggregate levels using panel data from Bangladesh. The results suggest that access to microfinance contributes to poverty reduction, especially for female participants, and to overall poverty reduction at the village level. Microfinance thus helps not only poor participants but also the local economy.
Journal Article
The welfare impacts of rural electrification in Bangladesh
Lack of access to electricity has been considered a major impediment to the growth and development of rural economies. Thus, the provision of electricity and other forms of modern energy has been a priority for many development organizations y including the World Bank. However, few impact studies of electrification have taken the endogeneity of the grid connection into account. Using a cross-sectional survey conducted in 2005 of 20,900 rural households in Bangladesh, this paper examines the welfare impacts of household access to grid electricity after controlling for endogeneity bias. The econometric analysis shows that grid electrification has significant positive impacts on household income, expenditure, and education. The household gain in total income due to electrification is as high as 21 percent, with a 1.5 percentage point reduction in poverty per year. The results also suggest that the income and expenditure effects of electricity connection are higher for better-off households.
Journal Article
Handbook on impact evaluation : quantitative methods and practices
This book reviews quantitative methods and models of impact evaluation. The formal literature on impact evaluation methods and practices is large, with a few useful overviews. Yet there is a need to put the theory into practice in a hands-on fashion for practitioners. This book also details challenges and goals in other realms of evaluation, including monitoring and evaluation (M&E), operational evaluation, and mixed-methods approaches combining quantitative and qualitative analyses. This book is organized as follows. Chapter two reviews the basic issues pertaining to an evaluation of an intervention to reach certain targets and goals. It distinguishes impact evaluation from related concepts such as M&E, operational evaluation, qualitative versus quantitative evaluation, and ex-ante versus ex post impact evaluation. Chapter three focuses on the experimental design of an impact evaluation, discussing its strengths and shortcomings. Various non-experimental methods exist as well, each of which are discussed in turn through chapters four to seven. Chapter four examines matching methods, including the propensity score matching technique. Chapter five deal with double-difference methods in the context of panel data, which relax some of the assumptions on the potential sources of selection bias. Chapter six reviews the instrumental variable method, which further relaxes assumptions on self-selection. Chapter seven examines regression discontinuity and pipeline methods, which exploit the design of the program itself as potential sources of identification of program impacts. Specifically, chapter eight presents a discussion of how distributional impacts of programs can be measured, including new techniques related to quantile regression. Chapter nine discusses structural approaches to program evaluation, including economic models that can lay the groundwork for estimating direct and indirect effects of a program. Finally, chapter ten discusses the strengths and weaknesses of experimental and non-experimental methods and also highlights the usefulness of impact evaluation tools in policy making.
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