Attrition in the Kwazulu Natal income dynamics study, 1993-1998

This paper examines attrition in the KwaZulu-Natal Income Dynamics Study (1993–1998) and assesses the extent of attrition bias for a specific empirical example. The analysis shows that 1993 first round nonresponse is largely unrelated to observable characteristics of the communities other than indicators of migration activity. Multivariate regressions are then used to describe the characteristics of the households attriting in 1998, revealing the importance of distinguishing between two types of attriting households, those that moved and those that apparently moved but left no trace. For example, increased household size reduced the probability of either type of attrition, whereas measures of higher quality of fieldwork in the 1993 survey only reduced the probability that a household left no trace. While observable differences between attritors and non-attritors indicate attrition is nonrandom, it does not necessarily follow that estimated relationships based on the non-attriting sample suffer from attrition bias. To more directly explore attrition bias, which is by its nature model specific, this analysis estimates household-level expenditure functions correcting for attrition bias using standard Heckman selection procedures and a quality of 1993 interview variablesas identifying instruments. There is positive selection, and although many of the other parameter estimates are quite similar, a Hausman test rejects the equality of coefficients between the corrected and uncorrected models. Therefore, this study concludes, at least for this simple case, that attrition does appear to bias the “behavioral” coefficients.Consumers Mathematical models. ,Household consumption Mathematical models. ,Surveys. ,Analysis of variance. ,

Coping with the “coffee crisis” in Central America

"This study examines the effect of a safety-net program on households' well-being and work activities during an economic downturn. It considers (1) how rural Nicaraguan households without the Red de Protección Social (RPS) program fared over the period 2000–02, and (2) whether households benefiting from the program were better able to protect household expenditures and other aspects of well-being than their control counterparts during the same period.... While not designed as a traditional safety net program, RPS has performed like one, protecting most those in greatest need. It provided a cushion for per capita expenditures and protected coffee laborers from working additional hours. It also safeguarded investment in children. Thus RPS played a significant role in helping poor, rural Nicaraguans weather the coffee crisis." From Textconditional cash transfer program ,coffee crisis ,social safety nets ,

Impact evaluation of a conditional cash transfer program: the Nicaraguan Red de Protección Social

"In 2000, the Nicaraguan government implemented a conditional cash transfer program designed to improve the nutritional, health, and educational status of poor households, and thereby to reduce short- and long-term poverty. Based on the Mexican government's successful PROGRESA program, Nicaragua's Red de Protección Social (RPS) sought to supplement household income, reduce primary school dropout rates, and increase the health care and nutritional status of children under the age of five. This report represents IFPRI's evaluation of phase I of RPS. It shows that the program was effective in low-income areas and particularly effective when addressing health care and education needs. The report offers the first extensive assessment of a Nicaraguan government antipoverty program." Authors' AbstractRed de Protección Social (Nicaragua) Evaluation, Economic assistance, Domestic Nicaragua Evaluation, Public welfare Nicaragua, Child welfare Nicaragua, Poverty Nicaragua,

Impact evaluation of a conditional cash transfer program

"This paper presents the main findings of a quantitative evaluation of the Red de Protección Social (RPS), a conditional cash transfer program in Nicaragua, against its primary objectives. These included supplementing income to increase household expenditures on food, reducing primary school desertion, and improving the health care and nutritional status of children under age 5. The evaluation design is based on a randomized, community-based intervention with measurements before and after the intervention in both treatment and control communities. Where possible, we erred on the side of assessing effects in conservative manners, for example, in the calculation of standard errors and the treatment of possible control group contamination. Overall, we find that RPS had positive (or favorable) and significant double-difference estimated average effects on a broad range of indicators and outcomes. Where it did not, it was often due to similar, smaller improvements in the control group that appear to have been stimulated indirectly by the program. Most of the estimated effects were larger for the extreme poor. The findings presented here played an important role in the decision to continue this effective program." Authors' AbstractImpact evaluation ,Transfer payments ,Human capital ,Impact assessment ,

Impact evaluation of a conditional cash transfer program

"This paper presents the main findings of a quantitative evaluation of the Red de Protección Social (RPS), a conditional cash transfer program in Nicaragua, against its primary objectives. These included supplementing income to increase household expenditures on food, reducing primary school desertion, and improving the health care and nutritional status of children under age 5. The evaluation design is based on a randomized, community-based intervention with measurements before and after the intervention in both treatment and control communities. Where possible, we erred on the side of assessing effects in conservative manners, for example, in the calculation of standard errors and the treatment of possible control group contamination. Overall, we find that RPS had positive (or favorable) and significant double-difference estimated average effects on a broad range of indicators and outcomes. Where it did not, it was often due to similar, smaller improvements in the control group that appear to have been stimulated indirectly by the program. Most of the estimated effects were larger for the extreme poor. The findings presented here played an important role in the decision to continue this effective program." Authors' AbstractImpact evaluation ,Transfer payments ,Human capital ,Impact assessment ,

Trust, membership in groups, and household welfare

This paper explores the relationship between group membership and trust. Specifically, the authors examine (1) the importance of trust in the decision to join groups, (2) the subsequent ability of groups to generate trust, and (3) the influence of group membership and trust on a measure of well-being, per capita household income. They use longitudinal data from KwaZulu-Natal Province, South Africa, allowing them to control for potential simultaneity and measurement-error problems in the estimation. They disaggregate groups into financial and nonfinancial and “trust in people” by type of agent or actor. They can thus examine whether different types of trust are important for participating in different types of groups and whether different types of group participation are important for generating different types of trust. The research finds that (1) trust in local agents is an important determinant of membership in financial groups but not for membership in nonfinancial groups, (2) membership in both types of groups generates trust in nonlocal agents but not local agents, and (3) membership in financial and nonfinancial groups leads to higher well-being. The first two results suggest that financial groups serve a role in expanding the radius of trust, while the first and third results suggest a role for trust in improving well-being.Community participation South Africa. ,Financial institutions South Africa. ,Trust. ,Group membership. ,

Social capital and coping with economic shocks

"South African households live in an environment characterized by risks, and many face a significant probability of experiencing economic losses that threaten their daily subsistence. Using household panel data that include directly solicited information on economic shocks and employing household fixed-effects estimation, we explore how well households cope with shocks by examining the effects of shocks on child nutritional status. Unlike in the idealized village community, some households appear unable to insure against risk, particularly when others in their communities simultaneously suffer large losses. Households in communities with more social capital, however, seem better able to weather shocks." from Authors' Abstract

Trust, membership in groups, and household welfare

This paper explores the relationship between group membership and trust. Specifically, the authors examine (1) the importance of trust in the decision to join groups, (2) the subsequent ability of groups to generate trust, and (3) the influence of group membership and trust on a measure of well-being, per capita household income. They use longitudinal data from KwaZulu-Natal Province, South Africa, allowing them to control for potential simultaneity and measurement-error problems in the estimation. They disaggregate groups into financial and nonfinancial and “trust in people” by type of agent or actor. They can thus examine whether different types of trust are important for participating in different types of groups and whether different types of group participation are important for generating different types of trust. The research finds that (1) trust in local agents is an important determinant of membership in financial groups but not for membership in nonfinancial groups, (2) membership in both types of groups generates trust in nonlocal agents but not local agents, and (3) membership in financial and nonfinancial groups leads to higher well-being. The first two results suggest that financial groups serve a role in expanding the radius of trust, while the first and third results suggest a role for trust in improving well-being.Community participation South Africa. ,Financial institutions South Africa. ,Trust. ,Group membership. ,

Intrahousehold allocation and gender relations

The paper reviews recent theory and empirical evidence testing unitary versus collective models of the household. In contrast to the unitary model, the collective model posits that individuals within households have different preferences and do not pool their income. Moreover, the collective model predicts that intrahousehold allocations reflect differences in preferences and "bargaining power" of individuals within the household. Using new household data sets from Bangladesh, Indonesia, Ethiopia, and South Africa, we present measures of individual characteristics that are highly correlated with bargaining power, namely human capital and in ividually-controlled assets, evaluated at the time of marriage. In all country case studies we reject the unitary model as a description of household behavior, but to different degrees. Results suggest that assets controlled by women have a positive and significant effect on expenditure allocations toward the next generation, such as education and children's clothing. We also examine individual-level education outcomes and find that parents do not have identical preferences toward sons and daughters within or across countries.households ,resource allocation ,income ,