Development Economics Lecture 5: Poverty Alleviation
45 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

Which households were eligible for the Give Directly program?

  • Households with a concrete roof
  • Households with a thatched roof (correct)
  • Households led by single parents
  • Households with the highest income

    • What was NOT measured as an impact of the Give Directly program after the transfers ended?

  • Health investments (correct)
  • Food security
  • Subjective well-being
  • Asset accumulation

    • Which treatment effect showed a positive outcome after the Give Directly program?

  • Investments in education
  • Food security (correct)
  • Increased labor force participation
  • Creation of new businesses

    • What aspect of consumption saw no measurable increase during the study?

    <p>Temptation goods like alcohol or tobacco</p> Signup and view all the answers

    Which of the following effects was observed regarding asset investment?

    <p>Increase in productive asset investments</p> Signup and view all the answers

    What does the Give Well organization rate the Give Directly program as?

    <p>Highly effective</p> Signup and view all the answers

    Which type of poverty trap is characterized by issues related to nutrition, education, and health?

    <p>Human capital poverty traps</p> Signup and view all the answers

    What factor was included in the randomization within the treatment group?

    <p>Recipient gender</p> Signup and view all the answers

    What is a major challenge associated with regulatory poverty traps?

    <p>Migratory and occupation restrictions</p> Signup and view all the answers

    What was a significant finding regarding existing businesses after the Give Directly program?

    <p>No change in labor force participation or occupation</p> Signup and view all the answers

    Which of the following is considered a psychological poverty trap?

    <p>Stress and mental health</p> Signup and view all the answers

    What are the two types of asset transfer programs mentioned?

    <p>Conditional and unconditional</p> Signup and view all the answers

    Which entity is known for implementing robust programs based on rigorous impact evaluations worldwide?

    <p>BRAC</p> Signup and view all the answers

    What is a characteristic of cash transfer programs according to the provided content?

    <p>Can be both unconditional and conditional</p> Signup and view all the answers

    What often accompanies multifaceted poverty alleviation programs?

    <p>Training and ongoing support services</p> Signup and view all the answers

    What is one of the main problems that poverty traps can create?

    <p>Discontinuities in returns to scale</p> Signup and view all the answers

    What is the estimated fiscal multiplier effect of cash transfers mentioned?

    <p>2.7</p> Signup and view all the answers

    What proportion of local GDP were the cash transfers worth?

    <p>15%</p> Signup and view all the answers

    Which statement about cash transfers is true according to the findings?

    <p>They are an efficient but often temporary method for alleviating poverty.</p> Signup and view all the answers

    What is a potential concern regarding scaling cash transfer interventions?

    <p>They may be complex and costly to implement.</p> Signup and view all the answers

    What can be inferred about the long-term effects of one-off poverty alleviation programs?

    <p>They can have long-term effects but do not always do so.</p> Signup and view all the answers

    What is one of the key challenges in the effectiveness of existing insurance in poor populations?

    <p>Widespread informal insurance but incomplete coverage</p> Signup and view all the answers

    Which factor contributes to the poor health outcomes and low levels of learning in disadvantaged communities?

    <p>Low quality of education and health services</p> Signup and view all the answers

    What are policymakers aiming to achieve with poverty alleviation programs?

    <p>Maximize total welfare and reduce current and future poverty</p> Signup and view all the answers

    What constraint must policymakers consider when developing poverty alleviation strategies?

    <p>Budget constraints and political consequences</p> Signup and view all the answers

    Why is improving outcomes for younger generations particularly valuable from a utilitarian perspective?

    <p>Benefits last over a life-cycle and investments yield greater returns</p> Signup and view all the answers

    Which of the following statements describes the state of land markets in relation to poverty?

    <p>Insecure titles negatively affect economic opportunities</p> Signup and view all the answers

    What type of infrastructure variation is evident among poorer communities?

    <p>Generally better access in urban areas compared to rural areas</p> Signup and view all the answers

    What is a significant barrier to reducing poverty through current interventions?

    <p>High costs without effective budget allocation</p> Signup and view all the answers

    What is the primary purpose of two-stage randomization in poverty studies?

    <p>To study spillover effects from an intervention</p> Signup and view all the answers

    Which of the following variables is NOT included in the analysis model Yk = ↵ + 1 assignmenti + Zik + Tcountry + Ushortsurvey + Vstratif ication + 'i?

    <p>Vacancy rates in treatment villages</p> Signup and view all the answers

    What could public lotteries help achieve in the context of poverty alleviation programs?

    <p>Build trust and avoid backlash</p> Signup and view all the answers

    Which component of treatment is directly estimated by comparing YT C and YCC?

    <p>Spillover effects on non-treated eligible households</p> Signup and view all the answers

    Which group does NOT benefit from the intended effects of a cash transfer intervention?

    <p>Ineligible households</p> Signup and view all the answers

    What is one implication of treating every observation as weighted equally in the analysis?

    <p>It ensures each observation's contribution is identical</p> Signup and view all the answers

    What negative outcome could result from large-scale cash transfers?

    <p>Higher prices impacting non-recipients</p> Signup and view all the answers

    What challenge does the concept of 'spillover effects' address in poverty alleviation programs?

    <p>Indirect effects on nearby non-treated households</p> Signup and view all the answers

    What is the primary purpose of the randomized saturation design in cash transfer studies?

    <p>To measure general equilibrium effects accurately</p> Signup and view all the answers

    What does the variable Zik represent in the context of the analysis equation?

    <p>Baseline value of the outcomes</p> Signup and view all the answers

    In the context of cash transfers, what are 'non-tradables'?

    <p>Services and goods not easily shipped</p> Signup and view all the answers

    What significant effect on non-recipients was observed from cash transfers?

    <p>Increase in expenditure and income</p> Signup and view all the answers

    What primary factor did the Give project vary to study the impact of cash transfers?

    <p>The proportion of treated individuals in a unit</p> Signup and view all the answers

    What consequence may arise from implementing cash transfers without considering market effects?

    <p>Diminished transfer value for recipients</p> Signup and view all the answers

    What does the term 'spillover households' refer to in cash transfer studies?

    <p>Households in the vicinity that benefit indirectly</p> Signup and view all the answers

    What impact does market access have on cash transfer outcomes?

    <p>Good access mitigates price increases for non-tradables</p> Signup and view all the answers

    Study Notes

    Development Economics Lecture 5: Poverty Alleviation

    • The lecture was given by Lukas Hensel at Peking University on October 17, 2024
    • The lecture focused on poverty alleviation.
    • The 2024 Nobel Prize in Economic Sciences was awarded to Daron Acemoglu, Simon Johnson, and James A. Robinson, "for studies of how institutions are formed and affect prosperity."
    • Absolute poverty has declined significantly globally, from approximately 38% in 1990 to less than 9% in 2019.
    • The share of the population living in extreme poverty has been falling over time in many countries, including China, India, and others.
    • However, global poverty remains a significant issue, with hundreds of millions still living in extreme poverty.

    Living in Poverty

    • Poverty is multifaceted, encompassing not just monetary factors but also social, psychological, and institutional aspects, affecting household decisions.
    • Factors such as family size, education, healthcare, and social networks significantly influence economic choices and behaviors of those in poverty.

    Poverty Traps

    • Poverty traps describe situations where individuals or countries are stuck in a cycle of low economic activity, making it hard to escape poverty.
    • One-off interventions alone may not eradicate poverty if it's entrenched in a poverty trap.

    Modern Poverty Alleviation Programs

    • Two main types exist:
    • Multifaceted programs involve providing assets like livestock and accompanying training and ongoing support. These programs often include a cash component.
    • Cash transfers provide direct cash payments, sometimes tied to conditions, such as school attendance or health check-ups.

    Nobel Prize Winners 2024

    • The 2024 Nobel Prize in Economic Sciences was awarded to Daron Acemoglu, Simon Johnson, and James A. Robinson.

    Housekeeping

    • Previous lecture materials and problem sets are available online.
    • The first problem set is due on Thursday, October 24th.
    • No presentations are scheduled for today, but presentations are planned for subsequent weeks.

    Key Economic Patterns

    • Defining the Poor:

      • Consumption thresholds are often used, while accounting for differences in the cost of living between countries is vital to avoid inaccurate or inconsistent data.
      • Difficulties in measuring and interpreting within-country price adjustments create challenges for accurate poverty estimations.

    • Living Arrangements:

      • Large households may spread fixed-cost burdens.
      • High mortality rates are often correlated with increased household sizes.

    • Earnings:

      • Self-employment is commonly found but often on a small scale, not growing over time.
      • Low specialization limits earnings but may reduce risk.
      • Temporary but not permanent migration is widespread, impacting employment and earnings.

    • Spending: Spending patterns often prioritize essential needs like food over non-essential amenities.

      • High spending on food consumption doesn't always mean that calories are being optimized.
      • There are instances of overconsumption in many middle-income countries. Consumption patterns often reflect cultural priorities and traditions.

    • Markets:

      • Access to formal credit is often limited and expensive which can reflect the high costs of screening borrowers.
      • Informal credit and savings are prevalent.
      • Informal insurance is prevalent but doesn't account for unforeseen shocks (insurance being incomplete).
      • Land markets frequently involve insecure titles, affecting economic stability and planning.

    • Infrastructure: There is often wide variation in access to basic services like electricity, water, and sanitation. Basic standards of infrastructure are inconsistently developed.

    Treatment Components and Randomization

    • Various treatment components and randomization methods were employed in the study of cash transfers.
    • The goal was to identify treatment effects on eligible households while accounting for potential spillover effects on non-treated eligible households. This was achieved via the use of public lotteries in different villages.

    Study Timeline

    • The timeline for the different phases of data collection and asset/cash transfers are outlined

    Data Collection and Analysis

    • Data collection involves multiple methodologies, to capture the complexities of individuals living in different conditions.
    • A village census may be necessary to improve identification of relevant households, leading to more reliable data collection.
    • Data analysis frequently involves comparing treatments and outcomes from multiple years.

    Results After Three Years

    • Studies of effects on consumption, assets, and revenues yielded positive results in many cases as well as insights into additional non-economic outcomes, such as psychological well-being.

    MHT Corrected Results

    • Statistical significance and effect sizes of different economic outcomes were corrected to account for multiple hypothesis testing, demonstrating significant positive effects in many cases.

    Benefit-Cost Ratios and Rates

    • Studies frequently find that these programs were, on average, highly cost-effective.
    • Factors such as the internal rate of return and sensitivity analysis are used to understand the economic viability, impact, and long-term effect of these cash transfer programs,.

    Implications and Interpretation of Results

    • Study findings indicate that one-off interventions may not be sufficient to overcome poverty traps, sometimes leading to more complex, longer-term programs being required.
    • A slight enhancement in transfers sizes could lead to disproportionately positive outcomes

    Limitations of the Studies

    • The relatively small sample sizes in studies can lead to limited generalizability of the findings to larger populations.
    • Study focus may not include sufficiently relevant long-term outcomes to fully evaluate long-term effects on individuals, households, and communities..

    Discussion

    • Complex programs often achieve more sustainable poverty reduction but at a higher cost compared to cash transfers.
    • If the goal is to mitigate temporary poverty, straightforward cash transfers can effectively reduce its instances.

    Extensions

    • Various programs and studies are further explored to help clarify and deepen some of the arguments made within the lecture. Multiple studies and examples are mentioned to support the point. Various parameters for future intervention experiments are considered. Ethical concerns are accounted for in the experimental design and execution in the studies.

    Studying That Suits You

    Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

    Quiz Team

    Related Documents

    Development Economics Lecture 5: Poverty Alleviation PDF

    Description

    This quiz covers the key points from Lecture 5 of Development Economics, focusing on poverty alleviation strategies and trends. It discusses the significant decline in absolute poverty globally while highlighting remaining challenges. Learn about the multifaceted nature of poverty and the institutional factors that affect prosperity.

    More Like This

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser