Working Papers
Entrepreneurs in Space: Experimental Evidence from Kampala, Uganda
[AEA RCT Registry] [PEDL Project Summary]
In Kampala, Uganda, profits for observationally similar microentrepreneurs vary as much as 200% between city parishes. This may reflect sorting by entrepreneurs or a causal effect of business location, where entrepreneurs could increase profits by moving business locations. I cross-randomize a moving subsidy, which pays out to microentrepreneurs who relocate their businesses within the city, with an information intervention, which tells entrepreneurs about higher profit business locations in the city. Entrepreneurs realize higher profits – net of and exceeding the value of the subsidy – as the result of moving, but only when they receive both the subsidy and information. This indicates the existence of profitable moves, and thus a causal effect of location itself, as well as a complementarity between the subsidy and information that uniquely unlocks the spatial arbitrage opportunity. Impacts cease after subsidies end, perhaps suggesting that the subsidy played an important role in insuring moving risk or compensating entrepreneurs for the nonpecuniary costs of moving business locations.
How Important are Investment Indivisibilities for Development? Experimental Evidence from Uganda with Joe Kaboski, Molly Lipscomb, and Virgiliu Midrigan
[paper link] [NBER Working Paper] [VoxDev]
Theoretically, indivisible investments can lead to lower development, poverty traps, and risk-loving behavior. Testing this, we offered peri-urban Ugandans a choice between a safer, lower payoff and a riskier, larger payoff lottery; 27% of participants choose the riskier lottery, with winners investing more in land and durable business assets, eventually increasing income. In contrast, winning the small lottery has only transitory impacts on business inventory and livestock. Our quantitative model shows that the aggregate effects of financial deepening are sizable if the indivisible investment can be accumulated (e.g., capital) but not if it is in fixed supply (e.g., land).
Implications of the Growth of Defined Contribution Retirement Plans for Safety Net Eligibility: The Case of Dual Eligibility for Medicare and Medicaid with Melissa McInerney, Jennifer M. Mellor, and Lindsay M. Sabik
Small balances from tax-preferred retirement accounts such as 401(k)s and IRAs can render some older adults ineligible for Medicaid, an important supplement to Medicare for older and disabled Americans who have low income and assets. The purpose of this study is to understand whether older low-income adults have assets in these tax-preferred accounts, hereafter defined contribution (DC) wealth, and whether DC wealth has implications for Medicaid eligibility. Using 2015-19 Medicare Current Beneficiary Survey (MCBS) data, the study finds half of all older adults with low income have either DC wealth or income from defined benefit (DB) pension plans and DC wealth is becoming more prevalent among younger cohorts of older adults, who are more likely to have DC wealth than DB income. Findings indicate that older adults with DC wealth are 3.4 percentage points less likely to be eligible for Medicaid than similar peers with DB income. In an exercise where DC wealth is hypothetically converted to an annuity, this eligibility gap disappears. A possible policy solution would be to exclude DC wealth from the asset test, which would target the least advantaged beneficiaries and mimic the current eligibility criteria of the Supplemental Nutrition Assistance Program (SNAP).
Publications
Big Fish in Thin Markets: Competing with the Middlemen to Increase Market Access in the Amazon with Viva Bartkus, Wyatt Brooks, and Joe Kaboski. Journal of Development Economics (2022)
[paper link] [NBER Digest] [VoxDev]
Selected Works in Progress
Market Integration After Conflict: Experimental Evidence from Rural Colombia with Viva Bartkus, Wyatt Brooks, and Joe Kaboski (fieldwork complete)
Efficiency in Organizational Structure: Experimental Evidence from Ugandan Schools with Viva Bartkus, Wyatt Brooks, Joe Kaboski, Kelly Rubey, and Maurice Sikenyi (fieldwork complete)
Carolyn Pelnik 