learning best practices from peers · learning best practices from peers experimental evidence from...
TRANSCRIPT
Learning Best Practices from PeersExperimental Evidence from Small-scale Retailers in an Emerging Market
Patricio S. Dalton1 Julius Ruschenpohler2 Burak Uras1
and Bilal Zia3
1Tilburg University
2CEGA, UC Berkeley
3The World Bank
This project has been funded by the UK Department for International Development (DFID)(EIP-LIC/PO5639)
Glasgow University, Centre for Development Studies Guest Lecture
7 March 2019Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 1 / 50
Background
Micro & Small firms (MSEs) is the main source of employment indeveloping world.
For instance in Indonesia: MSEs represent 99% of all firms and 94.5% ofemployment (Ministry of Cooperatives and SMEs Indonesia, 2011).
→ Fostering MSE growth is an important development policy goal.
MSMEs in developing countries face different constraints to grow:I Financial (e.g., credit: Banerjee et al., 2015; savings: Dupas et al., 2016)I Managerial knowledge and skills (Fernandes et al., 2014; Miller et al., 2015;
McKenzie and Woodruff, 2017; Anderson, Chandy, and Zia, 2017)
→ This paper: fostering business knowledge and skills (practices), whereevidence of impact has been mixed (McKenzie and Woodruff, 2017).
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 2 / 50
Business PracticesBusiness practices are important for firm productivity.
I Medium and large firms: Bloom and Van Reenen (2007), Bloom et al. (2013).I Small firms: McKenzie and Woodruff (2017), Anderson, Chandy, and Zia
(2017)→ Business practices could explain firm productivity differences andmacro outcomes:
I Foster et al. (2008), Hsieh and Klenow (2009), Bartelsman et al. (2013)
Heterogeneity of businesses practices used within and between firms.
Business training programs offer formal and standardized coursesdeveloped in the Western world.
Small and statistically insignificant effects on MSEs in developing world(McKenzie and Woodruff (2014 & 2017)):
I Business practicesI Sales and Profits
Perhaps standard business training is not what firms need?
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 3 / 50
Best Practices From Peers in the Local Context
We propose an alternative to (formal) business training programs:
→ Make use of the local heterogeneity across businesses.→ Learn from successful local businesses about business practices thatare associated with high performance.→ Make these practices and adoption information common knowledgeto other businesses.
Advantages:I Low cost: For the policy maker and the beneficiary.I Relevant: We have contemporaneous evidence that the practices may work.I Idiosyncratic to the local context, habits, and norms.
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 4 / 50
Which information do we provide?
Our study design focuses on the provision of two types of information:
I Quantitative: Practices exhibiting strongest association with profits - basedon context-specific relevance ranking constructed from cross-sectionalanalysis at baseline.
I Qualitative: Detailed accounts of local customs and habits used bysuccessful peers to implement the businesses practices.
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 5 / 50
How do we provide the information?
Handbook of best practicesI Information: Which practices, how to adopt, and why?
Topped up with two types of experiential learning interventions:
Successful business peers movieI Psychological and emotional involvement → social learning is possible
through observing the successful experience of similar others.I Bernard, et al. (2014); La Ferrara et al. (2012); Chong and La Ferrara (2009);
Berg and Zia (2013).
Personalized business practice implementation helpI Hands-on involvement → social learning is possible through own
experience, with a small nudge.I Bruhn, Karlan, and Schoar (2016); Carpena et al. (2017).
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 6 / 50
Our Research Questions
Local characterizationI Which practices are associated with high profits?I How do successful businesses implement them?
AdoptionI Do retailers adopt these practices once peer information is made common
knowledge?I If so, ...
F Does the type of experiential involvement matter?
ImpactI Does firm profitability increase?I If so, what are the channels?
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 7 / 50
Literature: Social Learning and Business Practices
Our research is the most relevant for the recent literature on mobilizingexperiences of peers in the local context to induce business growth:
I Cai an Szeidl (2018, QJE)I Fafchamps and Quinn (2018, WBER)I Lafortune et al. (2018, AEJ: Applied)
We differ from the existing studies in two important dimensions:1 Collect and aggregate detailed local information and then disseminate it
(anonymity of business owners is preserved).2 Without direct contact of business owners.
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 8 / 50
Sampling and Randomization
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 9 / 50
Sample and Random Assignment
List of a random sample of 2042 small retail businesses, warungs.Random sub-sample of 1301 from the list
Selection criteria for firm listing:I At least 4m2 in sizeI At least two different product categories on offerI At least 30 meters distance to next business in sampleI Stable business premises, no franchises
Randomization to treatments arms stratified byI GenderI Firm space (4-6m2, 6-10m2, 10 and above m2)I Composite score of business practices above or below medianI Sub-District
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 10 / 50
Retailer
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 11 / 50
Retailer
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 12 / 50
Qualitative Interviews
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 13 / 50
Interventions
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 14 / 50
Treatments
Three types of information provision on knowledge and skills:I Handbook with top practicesI Movie with successful peersI Business practice implementation help
Five experimental groups1 Handbook only (N=260)2 Handbook and invitation to movie screening (N=260)3 Handbook and offer of two help visits (N=260)4 Handbook and both movie and help (N=260)5 Control (N=261)
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 15 / 50
Handbook
Figure: Best-practices handbook
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 16 / 50
Handbook: Type of Information
Profits associated with selected practices→ From cross-sectional analysis at baseline
Implementation guide→ Drawing on additional information from qualitative interviews
Exercise book to practice
Short guide with an overview of the practices and a summary of eachstep within each practice
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 17 / 50
Selection of Potentially Profitable Practices
Cross-sectional analysis at baseline
I Core set of business practices: McKenzie and Woodruff (2017).I We extend this set based on the results from qualitative interviews with 102
retailers, which was done before listing for baseline.F New business practices.F Learn about the idiosyncratic way of implementing the practices.F Select potential successful peers.
I Selection on observables
Yi1 = βPi1 + γXi1 + εi
F Yi1: 8 different proxies for firm performance (sales/profits, customers)F Pi1: Subsets of practices (e.g., marketing practices from M&W, 2017)F Xi1: Firm-level controls (e.g. firm size, number of employees)
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 18 / 50
Selection of Potentially Profitable Practices - II
Strongest association with performance→ Cut-off: Regressor significant in at least 6 of the 8 specifications
Largest effect sizes→ Cut-off: Highest 25th percentile in distribution of all effect sizes
Number of Adoption effect size Handbook
Specifications Monthly sales Monthly profits Returns to Mention
Significant (Comp, IHS) (Comp, IHS) adoption
Record-Keeping
Keeps Written Business Records R1 7 0.283 0.259 X X
Keeps Collection of Loose Receipts Radd2 7 0.189 0.215
...
...
Records Salaries and Other Costs Radd12 0 -0.007 -0.007
Records Outstanding Payments by Customers Radd13 7 0.401 0.361 X X
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 19 / 50
Which Practices were Potentially Profitable?
Selected “local best practices”
I MarketingF e.g., “Offer price discounts”F e.g., “Consulting former customers”
I Record KeepingF e.g., “Keep records of profits”
I Stocking UpF e.g., “Develop a fixed schedule for the purchase of the main products”F e.g., “Stock up daily rather than weekly”
I Financial PlanningF e.g., “Set monthly sales targets”
I Discussing Business Matters and Joint Decision-MakingF e.g., “Discuss business matters before making decisions?”
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 20 / 50
Handbook: Info on Practice-Profits Relations
Figure: Practice-Profits relationship information on specific practices
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 21 / 50
Handbook: Implementation Guidelines
Figure: Step-by-step guide to implementing specific practices as part of broaderpractice categories
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 22 / 50
Movie with Successful Peers
Figure: Movie screening
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 23 / 50
Movie with Successful Peers - II
How were the successful peers (role models) selected?I Qualitative interviews and quantitative baseline survey
→ Top 5 retailers selected to represent the local frontier in each of the Top 5practices - from 102 retailers interviewed before the baseline.
F We capture local ways of implementing best practices in a 24-minutes moviefeaturing these successful peers.
F We invite business owners to public movie screenings in local public facilities.F Screenings end with a presentation by trained local staff which ties the practices
back to the handbook.
→ Importantly: The practices presented in the movie cover the same topicspresented in the handbook.
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 24 / 50
Implementation Help for Business Practices
Figure: A facilitator explaining the record-keeping chapter in a help session
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 25 / 50
Implementation Help for Business Practices - II
Training of local staffI Extensive handbook studyI Background knowledge of small retail businesses in JakartaI Behavioral techniques to work with goals and commitments
Implementation help sessions (of 30-40 minutes each)I 1st session
F Ask entrepreneur which handbook practices they are most interested inimplementing
F Diagnose constraints to knowledge acquisition and practice implementationF Offer solutions derived from handbookF Set goals for next session to follow up on
I 2nd session (one to two weeks later)F Follow up on progress and diagnose constraintsF Offer solutions derived from handbookF Set goals for entrepreneur to progress individually
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 26 / 50
Sample Map
Figure: City-level representation of the final sample of 1301 retail businesses
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 27 / 50
Sample Map - II
Figure: District-level representation of a sub-sample
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 28 / 50
Summary of Research Timeline
1 September 2015: Qualitative Interviews (102)
2 January 2016: Listing for Baseline (2042 - excludes initial 102)
3 Feb-Apr 2016: Baseline Survey (1301)
4 Oct-Nov 2016: Interventions (1040)
5 Apr-May 2017: Midline (1301)
6 Apr-May 2018: Endline (1301)
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 29 / 50
Data
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 30 / 50
Summary Statistics
Control HB only HB & MOV HB & HELP HB & MOV& HELP
N = 261 N = 260 N = 260 N = 260 N = 260
Firm Owner CharacteristicsGender (Male=1) 0.28 0.3 0.29 0.3 0.28Age 45.22 45.27 45.28 45.16 45.38Education (Years) 9.1 9.52 9.36 9.42 9.55Risk Preference (0 - 10 “Perfectly Risk-Seeking”) 3.74 3.76 3.88 3.6 3.68Time Preference (0 - 10 “Perfect Patience”) 5.19 5.07 5.21 5.25 5.2
Firm CharacteristicsFirm Age (Years) 12.76 13.77 14.03 13.98 13.47Family Member Is Business Partner 0.56 0.6 0.63 0.59 0.62Total Number of Workers 2.03 2.05 1.9 1.99 2.04Business Has Tax ID 0.2 0.21 0.2 0.15 0.18Total Sales Last Month (USD PPP) 4454.37 4730.64 4840.55 4761.4 5139Total Profits Last Month (USD PPP) 889.58 961.1 926.78 825.25 934.66Applied for Bus Loan in Last 12 Months 0.2 0.17 0.15 0.22 0.17Obtained Bus Loan in Last 12 Months 0.18 0.15 0.14 0.18 0.14
Business PracticesManagement Practices Aggregate Score 0.37 0.36 0.37 0.35 0.37
Marketing Subscore 0.23 0.23 0.25 0.23 0.24Stocking-up Subscore 0.45 0.47 0.47 0.47 0.46Record-keeping Subscore 0.33 0.28 0.3 0.29 0.3Financial-planning Subscore 0.51 0.47 0.47 0.43 0.47
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 31 / 50
Sample Balance Across Interventions
HB only HB & MOV HB & HELP HB & MOV & HELP- Control - Control - Control - Control
(p-value) (p-value) (p-value) (p-value)
Firm owner characteristicsGender (Male=1) 0.611 0.825 0.68 0.867Age 0.959 0.951 0.951 0.866Education (Years) 0.185 0.446 0.327 0.174Risk Preference 0.902 0.451 0.453 0.739Time Preference 0.542 0.924 0.742 0.94
Firm characteristicsFirm Age 0.313 0.222 0.236 0.478Family Member Is Business Partner 0.447 0.116 0.561 0.165Total Number of Workers 0.837 0.218 0.708 0.919Business Has Tax ID 0.811 0.878 0.145 0.516Total Sales Last Month (USD PPP) 0.5 0.371 0.467 0.114Total Profits Last Month (USD PPP) 0.496 0.723 0.524 0.674Applied for Bus Loan in Last 12 Months 0.374 0.171 0.438 0.374Obtained Bus Loan in Last 12 Months 0.3 0.2 0.926 0.2
Business practicesManagement Practices Aggregate Score 0.372 0.973 0.33 0.958
Marketing Subscore 0.951 0.161 0.844 0.508Stocking-up Subscore 0.325 0.301 0.295 0.426Record-keeping Subscore 0.033** 0.134 0.067* 0.178Financial-planning Subscore 0.274 0.191 0.011** 0.254
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 32 / 50
Movie: Take Up and Assessment
(1) (2)HB & MOV HB & MOV
& HELP(A) (B)
N=260 N=260
AttendanceBusiness Owner or Partner Attended Film Screening 0.52 0.49
Evaluation (1-4 Scale):Has Learned Something New 3.34 3.21Feels Inspired 3.31 3.30Feels Hopeful 3.60 3.42Feels Bored 0.83 0.97
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 33 / 50
Help: Take Up and Assessment
(1) (2)HB & HELP HB & MOV,
& HELP(A) (B)
N=260 N=260
AttendanceBusiness Owner or Partner Attended 1st Session 0.77 0.78Business Owner or Partner Attended 2nd Session 0.68 0.68
Evaluation (1-4 Scale)Has Learned Something New 2.88 2.89Feels Inspired 2.76 2.83Feels Hopeful 2.88 2.97Feels Bored 0.59 0.43
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 34 / 50
Attrition
Completed Completed Business Closed Business ClosedMidline Endline Before Midline Before Endline
(1) (2) (3) (4)
Assigned Handbook -0.022 -0.035 0.011 0.005(0.024) (0.035) (0.020) (0.029)
Assigned Handbook & Movie -0.028 -0.008 -0.003 -0.003(0.025) (0.035) (0.019) (0.029)
Assigned Handbook & Help -0.021 -0.021 0.009 -0.001(0.024) (0.035) (0.020) (0.028)
Assigned All Three -0.034 -0.033 -0.005 -0.009(0.025) (0.035) (0.019) (0.028)
R-squared 0.032 0.043 0.034 0.043Sample Size 1301 1301 1301 1301Mean of Dependent Variable in Control Group 0.927 0.805 0.054 0.126F-tests (p-value):
Book = Book & Mov 0.822 0.452 0.499 0.805Book = Book & Help 0.982 0.702 0.947 0.843Book = All Three 0.642 0.952 0.444 0.643Book & Mov = Book & Help 0.803 0.708 0.540 0.960B & M + B & H > All Three 0.338 0.528 0.650 0.548
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 35 / 50
Outcome Analysis
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 36 / 50
Outcome Analysis: Intention-to-Treat Regressions
Estimate the ITT effect on a given outcome Y using the following ANCOVA:
Y2i = α +4
∑m=1
βmTmi + γX1i + δV + θM + ζY1i + εi
Y2i is the outcome for business i at midline and endline stacked uptogether.X is baseline stratification controls (gender, practice score, shop size).V represents village fixed effects, M is a dummy for midline surveyround.Y1i is the baseline value of the outcome of interest.Standard errors are clustered at the shop level across midline andendline.Coded missing control variables as zero and included dummy variablesto indicate missing values.
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 37 / 50
Business Practices: Record Keeping Outcomes
Rec-Keep Kept Record All Itemized EstimAgg Score Written Rec Purch & Sale Rev & Exp Cash on Hand
(1) (2) (3) (4) (5)
Assigned Handbook 0.009 -0.011 0.015 0.032 0.019(0.014) (0.008) (0.013) (0.029) (0.030)
Assigned Handbook & Movie 0.033** 0.000 0.029** 0.077*** 0.054*(0.014) (0.005) (0.014) (0.029) (0.031)
Assigned Handbook & Help 0.033** 0.001 0.026* 0.081*** 0.070**(0.014) (0.005) (0.014) (0.030) (0.031)
Assigned All Three 0.032** 0.006 0.016 0.082*** 0.051*(0.014) (0.004) (0.014) (0.030) (0.030)
Stratification Controls Yes Yes Yes Yes YesControl for Baseline Level of Outcome Yes Yes Yes Yes YesMidline Survey Dummy Yes Yes Yes Yes YesR-squared 0.205 0.034 0.112 0.142 0.127Sample Size 2205 2204 2204 2205 2204Dependent Variable Mean of Control 0.385 0.993 0.035 0.230 0.323Dependent Variable SD of Control 0.212 0.081 0.185 0.421 0.468F-tests (p-value):
Book = Book & Mov 0.112 0.148 0.335 0.139 0.248Book = Book & Help 0.107 0.090 0.428 0.117 0.105Book = All Three 0.134 0.010 0.927 0.105 0.278Book & Mov = Book & Help 0.993 0.927 0.858 0.894 0.623Book & Mov = All Three 0.949 0.147 0.402 0.866 0.917
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 38 / 50
Business Practices: Financial Planning Outcomes
Planning Review Fin Perf Anticipated Budget CompAgg Score To Iden Improv For Upcoming Costs Target vs. Act Sales
(1) (2) (3) (4)
Assigned Handbook 0.027 0.007 0.037 0.034(0.022) (0.033) (0.023) (0.035)
Assigned Handbook & Movie 0.043** 0.035 0.037 0.052(0.021) (0.033) (0.023) (0.034)
Assigned Handbook & Help 0.034* 0.041 0.040* 0.015(0.021) (0.032) (0.023) (0.033)
Assigned All Three 0.068*** 0.065** 0.056** 0.081**(0.022) (0.032) (0.023) (0.034)
Stratification Controls Yes Yes Yes YesControl for Baseline Level of Outcome Yes Yes Yes YesMidline Survey Dummy Yes Yes Yes YesR-squared 0.192 0.106 0.185 0.130Sample Size 2204 2204 2204 2204Dependent Variable Mean of Control 0.402 0.642 0.146 0.418Dependent Variable SD of Control 0.310 0.480 0.354 0.494F-tests (p-value):
Book = Book & Mov 0.487 0.396 0.971 0.613Book = Book & Help 0.754 0.298 0.918 0.578Book = All Three 0.073 0.074 0.445 0.180Book & Mov = Book & Help 0.675 0.869 0.887 0.277Book & Mov = All Three 0.245 0.359 0.413 0.402
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 39 / 50
Business Practices: Marketing Outcomes
Marketing Consulted Discounts Special OfferedAgg Score Former Cust To Loyal Cust Sale-Offers New-Product
(1) (2) (3) (4) (5)
Assigned Handbook -0.008 0.007 -0.027 -0.002 -0.010(0.017) (0.024) (0.032) (0.022) (0.033)
Assigned Handbook & Movie 0.029 0.042 0.041 0.039 0.016(0.018) (0.026) (0.034) (0.024) (0.033)
Assigned Handbook & Help 0.032* 0.026 0.055 0.017 0.041(0.018) (0.025) (0.034) (0.022) (0.033)
Assigned All Three 0.040** 0.057** 0.067** 0.034 0.018(0.019) (0.027) (0.034) (0.023) (0.033)
Stratification Controls Yes Yes Yes Yes YesControl for Baseline Level of Outcome Yes Yes Yes Yes YesMidline Survey Dummy Yes Yes Yes Yes YesR-squared 0.217 0.098 0.144 0.093 0.118Sample Size 2205 2204 2205 2204 2205Dependent Variable Mean of Control 0.309 0.142 0.358 0.111 0.624Dependent Variable SD of Control 0.262 0.349 0.480 0.314 0.485F-tests (p-value):
Book = Book & Mov 0.045 0.197 0.041 0.097 0.434Book = Book & Help 0.021 0.468 0.014 0.401 0.117Book = All Three 0.009 0.070 0.005 0.131 0.385Book & Mov = Book & Help 0.834 0.570 0.703 0.385 0.443Book & Mov = All Three 0.542 0.614 0.461 0.836 0.945
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 40 / 50
Business Practices: Stock-Up Outcomes
Stock-Up Top-Products Adj Stock Neg Low Comp P & QAgg Score Alw in Stock Based Prof P w/ Supp Across Supp
(1) (2) (3) (4) (5)
Assigned Handbook -0.007 0.031 -0.001 -0.008 -0.044(0.019) (0.029) (0.033) (0.028) (0.034)
Assigned Handbook & Movie 0.038* 0.066** 0.039 0.018 0.037(0.020) (0.028) (0.034) (0.029) (0.035)
Assigned Handbook & Help 0.011 0.026 -0.010 0.041 0.007(0.019) (0.028) (0.034) (0.029) (0.034)
Assigned All Three 0.053*** 0.041 0.091*** 0.055* 0.038(0.019) (0.029) (0.034) (0.029) (0.034)
Stratification Controls Yes Yes Yes Yes YesControl for Baseline Level of Outcome Yes Yes Yes Yes YesMidline Survey Dummy Yes Yes Yes Yes YesR-squared 0.187 0.054 0.111 0.108 0.153Sample Size 2205 2205 2205 2204 2204Dependent Variable Mean of Control 0.471 0.770 0.420 0.195 0.500Dependent Variable SD of Control 0.270 0.421 0.494 0.396 0.501F-tests (p-value):
Book = Book & Mov 0.014 0.198 0.226 0.350 0.018Book = Book & Help 0.304 0.862 0.785 0.084 0.125Book = All Three 0.001 0.720 0.007 0.025 0.013Book & Mov = Book & Help 0.150 0.130 0.144 0.446 0.372Book & Mov = All Three 0.405 0.348 0.130 0.210 0.965
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 41 / 50
Business Practices: Discussion Outcomes
Discussed Discussed Made Joint Drafted AgreementBus w/ Family Bus w/ Non-Family Bus Decisions For Joint-Decisions
(1) (2) (3) (4)
Assigned Handbook -0.012 -0.036 0.024 -0.001(0.034) (0.026) (0.031) (0.027)
Assigned Handbook & Movie 0.039 -0.024 0.038 0.041(0.032) (0.026) (0.031) (0.028)
Assigned Handbook & Help 0.072** -0.034 0.039 0.035(0.032) (0.026) (0.031) (0.027)
Assigned All Three 0.030 -0.017 0.068** 0.051*(0.033) (0.026) (0.030) (0.028)
Stratification Controls Yes Yes Yes YesControl for Baseline Level of Outcome Yes Yes Yes YesMidline Survey Dummy Yes Yes Yes YesR-squared 0.085 0.068 0.126 0.107Sample Size 2205 2205 2205 2205Dependent Variable Mean of Control 0.617 0.192 0.310 0.228Dependent Variable SD of Control 0.487 0.395 0.463 0.420F-tests (p-value):
Book = Book & Mov 0.133 0.640 0.640 0.124Book = Book & Help 0.011 0.937 0.628 0.172Book = All Three 0.229 0.462 0.148 0.058Book & Mov = Book & Help 0.291 0.703 0.980 0.826Book & Mov = All Three 0.793 0.784 0.321 0.737
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 42 / 50
Business Practices Not Covered in Treatments
Practices not covered in treatments but measured in baseline, midline,and endline did not get significantly influenced by our interventions. Forinstance:
I Observed Products for Sale at Competing BusinessI Asked Suppliers about High Demand ProductsI Advertised the BusinessI Identified Profit Contribution of Best ProductsI Kept Annual Profit and Loss StatementI Kept Annual Cash Flow StatementI Kept Annual Balance SheetI Kept Annual Income and Expenses Statement
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 43 / 50
Business ProfitsProfits Profits
last month last month(win 5%) (IHS)
(1) (2)
Assigned Handbook -91.307 -0.067(78.400) (0.088)
Assigned Handbook & Movie 110.378 0.055(86.841) (0.092)
Assigned Handbook & Help 310.455*** 0.261***(89.488) (0.096)
Assigned All Three 191.088** 0.199**(84.662) (0.094)
Stratification Controls Yes YesControl for Baseline Level of Outcome Yes YesMidline Survey Dummy Yes YesR-squared 0.179 0.211Sample Size 2172 2172Dependent Variable Mean in Control Group 894.544 6.817Dependent Variable SD in Control Group 1127.783 1.348F-tests (p-value):
Book = Book & Mov 0.020 0.167Book = Book & Help 0.000 0.000Book = All Three 0.001 0.003Book & Mov = Book & Help 0.038 0.035Book & Mov = All Three 0.382 0.129
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 44 / 50
Business SalesSales Sales
last month last month(win 5%) (log)
(1) (2)
Assigned Handbook -396.976 -0.102(314.252) (0.069)
Assigned Handbook & Movie 335.489 0.023(337.881) (0.077)
Assigned Handbook & Help 836.755** 0.123(372.924) (0.079)
Assigned All Three 807.462** 0.142*(358.384) (0.075)
Stratification Controls Yes YesControl for Baseline Level of Outcome Yes YesMidline Survey Dummy Yes YesR-squared 0.492 0.431Sample Size 2197 2197Dependent Variable Mean in Control Group 4998.923 7.965Dependent Variable SD in Control Group 5623.257 1.190F-tests (p-value):
Book = Book & Mov 0.020 0.087Book = Book & Help 0.000 0.003Book = All Three 0.000 0.001Book & Mov = Book & Help 0.171 0.224Book & Mov = All Three 0.188 0.128
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 45 / 50
Objective Measures
Shop is Shop is Prices areClean & Tidy Well-Stocked Clearly Marked
(1) (2) (3)
Assigned Handbook -0.016 0.017 0.037(0.026) (0.030) (0.025)
Assigned Handbook & Movie -0.029 0.070** 0.052**(0.027) (0.029) (0.025)
Assigned Handbook & Help -0.031 0.029 0.043*(0.027) (0.030) (0.025)
Assigned All Three -0.015 0.024 0.034(0.027) (0.031) (0.024)
Stratification Controls Yes Yes YesControl for Baseline Level of Outcome Yes Yes YesMidline Survey Dummy Yes Yes YesR-squared 0.148 0.119 0.065Sample Size 2204 2204 2204Dependent Variable Mean of Control 0.673 0.695 0.144Dependent Variable SD of Control 0.470 0.461 0.351F-tests (p-value): 0.616 0.071 0.566
Book = Book & MovBook = Book & Help 0.570 0.686 0.832Book = All Three 0.979 0.830 0.887Book & Mov = Book & Help 0.955 0.169 0.716Book & Mov = All Three 0.611 0.118 0.466
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 46 / 50
Expenses, Customers and Employment
We find no significant impact of treatments on:I Total Business ExpensesI Number of Customers
There is a marginally significant impact (at 10% level) of HB+Help on:I Total Number of Employees (6% ↑ wrt Control)I Total Number of Family Employees (6% ↑ wrt Control)
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 47 / 50
Mechanisms
Monthly profits ↑ by 35% wrt Control (=USD 310 or 0.28 sd increase) forHB+Help and by 21% wrt Control (=USD 190 or 0.17 sd increase) for AllThree.
Monthly sales ↑ by 17% (0.15 sd increase) wrt Control for HB+Help andAll Three.
= expenses
= number of customers
Efficiency gains from managing better the business (more efficientstock-up, marketing, planning, etc)
Note 1: Effects are long-term (and likely to be permanent) - as the resultsare from a midline (6 months) and an endline (18 months).Note 2: One reason for larger significance with Help relative to Movie istake-up (77% vs 50%). With ToT coefficient estimates for Movie scale up,but also the SEs - so we don’t get significance.
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 48 / 50
Cost-Effectiveness
Low cost per firm:I Cost Handbook alone: USD 100I Cost Handbook & Movie: USD 125I Cost Handbook & Help: USD 125I Cost Handbook & Help & Movie: USD 150
High BenefitsI Up to USD 330 per month in profits.I Adoption of top practices by retailers.
Research Design scalable and replicable in other settings.
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 49 / 50
Takeaways
It is possible to create behavioral changes and substantial small-firmgrowth with very low-cost interventions.
Peer information alone is not enough for social learning.
Need to see successful peers implementing the practice, or to implementthe practice with some little help.
No need of formal business education nor to organize businesses’owners personal meetings
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 50 / 50
Many thanks for the invitation! [email protected]
Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 50 / 50