Changing Households’ Investments and Aspirations through Social Interactions : Evidence from a Randomized Transfer Program

Changing Households’ Investments and Aspirations through Social Interactions : Evidence from a Randomized Transfer Program

Low aspirations can limit households investments and contribute to sustained poverty. Vice versa, increased aspirations can lead to investment and upward mobility. Yet how aspirations are formed is not always well understood. This paper analyzes t...

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Bibliographic Details
Main Authors: Macours, Karen, Vakis, Renos
Format: Policy Research Working Paper
Language:English
Published: 2012
Subjects:
AFFILIATED ORGANIZATIONS
ASSET BASE
ATTENDANCE REQUIREMENT
ATTRITION
BANK POLICY
BENEFICIARIES
BENEFICIARY
BEQUEST
CAPITAL INVESTMENT
CAPITAL INVESTMENTS
CASH TRANSFER
CASH TRANSFERS
CHECKS
COGNITIVE DEVELOPMENT
COMMUNITIES
DESCRIPTION
DEVELOPING COUNTRIES
DEVELOPMENT ECONOMICS
DWELLINGS
EARLY CHILDHOOD DEVELOPMENT
ECONOMIC THEORY
ECONOMICS
EDUCATION SPENDING
EDUCATIONAL OUTCOMES
EMPLOYMENT
ENROLLMENT
EQUALITY
EXPENDITURES
FEDERAL RESERVE
FEDERAL RESERVE BANK
FEMALE
FINANCIAL SUPPORT
FREE PRESS
GAME THEORY
HOLDINGS
HOMES
HOUSEHOLD INCOME
HOUSEHOLDS
HOUSES
HOUSING
HUMAN CAPITAL
INCOME LEVEL
INCOME LEVELS
INFORMATION ASYMMETRIES
INTERNATIONAL BANK
INTERVENTION
INTERVENTIONS
INVESTING
INVESTMENT BEHAVIOR
INVESTMENT GRANTS
LABOR MARKET
LEADERSHIP
LEARNING
LIQUIDITY
LIQUIDITY CONSTRAINTS
LIVING STANDARDS
LOCAL ECONOMY
MARKET ACCESS
MENTAL HEALTH
MICROCREDIT
MICROFINANCE
MOBILITY
MOTIVATION
NEIGHBORHOOD
NUMERACY
NUTRITION
POLITICAL ECONOMY
PRICE CHANGES
PRIMARY CAREGIVERS
PRIMARY SCHOOL
PRODUCTIVE CAPITAL
PRODUCTIVE INVESTMENT
PRODUCTIVE INVESTMENTS
PROFITABILITY
REGULAR ATTENDANCE
RETURNS
RETURNS TO EDUCATION
RISK MANAGEMENT
RISK MANAGEMENT STRATEGIES
SAFETY
SAFETY NET
SCHOOL ATTENDANCE
SCHOOLING
SKILLS TRAINING
SOCIAL MOVEMENTS
SOCIAL NETWORKS
SOCIAL SCIENCE
STOCKS
TEACHERS
TRANSACTION
TRANSACTION COSTS
TRANSPARENCY
TRUST FUNDS
VOCATIONAL TRAINING
WAGES
Online Access:http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20091120144603
http://hdl.handle.net/10986/4330
Description
Summary:Low aspirations can limit households investments and contribute to sustained poverty. Vice versa, increased aspirations can lead to investment and upward mobility. Yet how aspirations are formed is not always well understood. This paper analyzes the role of social interactions in determining aspirations in the context of a program aimed at increasing households' investments. The causal effect of social interactions is identified through the randomized assignment of leaders and other beneficiaries to three different interventions within each treatment community. Social interactions are found to affect households attitudes toward the future and to amplify program impacts on investments in human capital and productive activities. The empirical evidence indicates that communication with motivated and successful nearby leaders can lead to higher aspirations and corresponding investment behavior.

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