the state of atai and next steps - povertyactionlab.org
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THE STATE OF ATAI AND NEXT STEPS
RACHEL GLENNERSTER
ATAI Matchmaking Conference – May 2013
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Agriculture and poverty
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What explains low take up
£ Not available or not known about? ¢ Why no market for intermediaries to inform?
£ Not profitable? ¢ If no market inefficiencies, if people not taking up
suggests not profitable, should not promote £ But there are market inefficiencies
¢ which inefficiencies are most important and what are the most cost-effective ways to overcome them
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From Adoption to Impact
£ ATAI tests take-up of proven technologies
£ But debate about impact of many technologies
£ DFID through Gates funding studies on impact—on output, consumption, nutrition ¢ 1-2 large studies ¢ add ons to existing studies with strong take up
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Market inefficiencies
1. Credit markets 2. Risk markets 3. Information 4. Externalities 5. Input and output markets 6. Labor markets 7. Land markets
Complementarities in addressing multiple barriers?
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Credit markets
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Credit market inefficiencies
¢ Many technologies require upfront investment ¤ High interest rates, minimum balances, and lack of collateral
¢ Lenders face risks too ¤ Small farmers hard to monitor and may have limited liability ¤ Correlated risks, long repayment cycles ¤ Leads to high interest rates
¢ Need innovations that reduce risk in lending to the poor
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ATAI Credit Market Research
¢ Collateralized lending (Jack et al) ¤ Can substituting collateral for cosignatory requirement
increase take up of loans and technology?
¢ Financial Access in India (Field, Pande, Robert) ¤ Does access to microfinance increase technology adoption?
Through what channels?
¢ One Acre Fund in Kenya (Miguel, Burke) ¤ Can better storage act as saving instrument, and increase
take-up?
¢ BRAC in Uganda (Bandiera et al) ¤ Does combining credit with agricultural extension more
effectively promote adoption that extension alone?
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Risk markets
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Risk market inefficiencies
¢ Adopting a new technology can be risky… ¤ First adopters may face particularly high risk as may
take many years to understand returns in new context
¢ Informal insurance prevalent, but correlated risk
¢ Formal insurance should help solve the problem but ¤ Insurance markets have major problems, eg people
know if they are risky, being insured may change effort (moral hazard and asymmetric information)
¤ Are insurance products too hard to understand? ¤ Willingness to pay for insurance?
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ATAI Risk Market Research
¢ Two different approaches to addressing risk: ¤ Weather insurance (Ethiopia and Ghana) ¤ More resilient crops (drought and submergent tolerant)
¢ How does changing price and mixing insurance and credit promote take up of insurance
¢ What are yields of risk reducing varieties
¢ Does reducing risk (though insurance or new varieties) change how farmers invest: ¤ increase investment? ¤ take on more risky crops elsewhere?
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Information
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Information inefficiencies
¤ If information is valuable why cant an entrepreneur sell it?
¤ Information may be very local, need experimentation £ neighbors can see results, ie experimentation is a public good you
are not paid for.
¤ Benefits of some technologies (eg better ways to plant) cannot be “captured” by a seller
¤ People may not be able to tell good information from bad £ How to we signal credible information?
¤ Psychology suggests how we receive information may be important
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ATAI Information Research
¢ What are efficient ways to get information to farmers: ¤ Mobilizing social networks, how to target, rate of
spillovers (Beaman et al, Cole and Fernando) ¤ Using existing intermediaries with long term relations
and financial interest (Casaburi et al) ¤ Mobile phones (Cole and Fernando), SMS services
(Casaburi et al) ¤ Demonstration plots (Duflo et al) ¤ Subsidizing experimentation vs training (Ashraf and
Jack, Glennerster Kimmins, and Suri )
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Areas of little ATAI research
1. Credit markets 2. Risk markets 3. Information 4. Externalities 5. Input and output markets 6. Labor markets 7. Land markets
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Externalities
¢ Some technologies generate benefits to others ¤ Ex. Tree planting, conservation agriculture
¢ How can a farmer best be rewarded for the benefits they generate when they take up a technology?
¢ ATAI Externalities Research ¤ How can payment and information help in the adoption
of environmentally beneficial farming? (Ashraf and Jack)
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Inefficiencies in Input and Output Markets ¢ Farmers don’t buy improved inputs because cant tell quality ¢ Not a big enough market for new crop—fixed cost of set up ¢ No price difference for quality as quality hard to measure ¢ Good and bad quality produce is pooled, giving an
incentive to free ride
¢ ATAI Input/Output Market Research ¤ Can social pressure be used to increase milk quality in India?
(Banerjee, et al) ¤ Can contracts with traders be developed that can increase the
quality of produce? (de Janvry, and Casaburi and Reed)
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ATAI Input and Output Research
¢ Can social pressure be used to increase milk quality in India? (Banerjee, et al) ¤ How can cheaper testing of quality be introduced most
effectively? ¤ Does posting quality results reduce watering of milk?
¢ Can contracts with traders be developed that can increase the quality of produce? (de Janvry, and Casaburi and Reed) ¤ Do price signals get effectively pass through to farmers? ¤ Do intermediaries invest in farmers quality?
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Labor and Land Markets
¢ Does that lack of labor at the correct time restrict adoption of technology?
¢ ATAI Labor Research £ Does choice of technology differ by the gender of the labor
using the technology in the household? (Ashraf et al) £ Can credit for and increased mobility of labor affect
adoption? (Jack et al.)
¢ Land ¤ Do constricted labor markets reduce the ability of
farmers to make investments in technology? ¤ No current studies by ATAI (MCC doing some)
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ATAI Current Research Focus
¢ ATAI Brainstorming Conference Feb 2013
¢ Two prominent areas of focus: ¤ Behavioral Marketing ¤ Value Chains
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Behavioral Marketing
¢ How can we use the lessons from behavior economics to increase adoption of technologies?
¢ Many agricultural technologies have qualities people find it hard to invest in ¤ Short run costs, long run benefits ¤ Benefits hard to see (eg fortification, drought tolerance) ¤ Taste—hard or easy to change?
¢ Research Opportunities ¤ Vary marketing messages, using lessons from psychology ¤ Psychology suggests bundling hidden or long term benefits
with immediate and visible attributes
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Value Chains
¢ How can smallholder farmers be brought into value chain?
¢ How can equity along the value chain be increased? ¢ Can better contracts be designed that solve issues
¤ farmers not being able to commit to side sell ¤ Traders know more about price, farmers about quality
¢ How do we increase quality? ¤ Certification? ¤ Improved price signals
¢ Does integrated credit, information, and sales help farmers or make them more open to exploitation?
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Value Chains
¢ Research Challenges ¤ Value chains are large and complicated ¤ Difficult to know what unit to randomize (farmer? Trader?
Market?)
¢ Potential Research Opportunities ¤ Different farmers or traders get different contracts, ¤ Farmers or traders get different information ¤ Can randomize intermediaries ¤ Organizational form: how do you organize a cooperative
—hard but fascinating and very valuable
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Conference Objects
¢ Identify important questions that can be answered through rigorous impact evaluation ¤ preference for RCTs
¢ Find matches of researchers and practitioners interested in the same issues in similar regions/countries
¢ Identify possible opportunities where these questions could be tested
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Conference Objects II
¢ Realism check of opportunities ¤ are they at an early enough stage, ¤ are they of sufficient scale to provide sufficient sample
size
¢ Studies that are submitted to and funded by ATAI that fill our knowledge gap
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Conference Approach
¢ Examples of effective collaborations
¢ Practitioners share their projects and priorities
¢ Researchers share their research agenda
¢ In depth conversations between researchers and practitioner
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Conference Approach
¢ Initial sorting based on written input from both sides
¢ Note many researchers and practitioners are country constrained
¢ After hearing each other, request matches for tomorrows conversations
¢ Presentations of early work by new researcher/practitioner groups