Middleman margins and asymmetric information: an experiment with potato farmers in West Bengal

West Bengal potato farmers cannot directly access wholesale markets and do not know wholesale prices. Local middlemen earn large margins; pass-through from wholesale to farm-gate prices is negligible. When we informed farmers in randomly chosen villages about wholesale prices, average farm-gate sales and priceswere unaffected, but pass-through to farm-gate prices increased. These results can be explained by a model where farmers bargain ex post with village middlemen, with the outside option of selling to middlemen outside the village. They are inconsistent with standard oligopolistic models of pass-through, search frictions or risk-sharing contracts.Accepted manuscrip

Land acquisition and compensation in Singur : what really happened?

This paper reports results of a household survey in Singur, West Bengal concerning compensation offered by the state government to owners of land acquired to make way for a car factory. While on average compensations offered were close to the reported market valuations of land, owners of high grade multi-cropped (Sona) lands were undercompensated, which balanced over-compensation of low grade mono-cropped (Sali) lands. This occurred owing to misclassification of most Sona land as Sali land in the official land records. Under-compensation relative to market values significantly raised the chance of compensation offers being rejected by owners. There is considerable evidence of the role of financial considerations in rejection decisions. Land acquisition significantly reduced incomes of owner cultivator and tenant households, despite their efforts to increase incomes from other sources. Agricultural workers were more adversely affected relative to non-agricultural workers, while the average impact on workers as a whole was insignificant. Adverse wealth effects associated with under-compensation significantly lowered household accumulation of consumer durables, while effects on other assets were not perceptible. Most households expressed preferences for non-cash forms of compensation, with diverse preferences across different forms of non-cash compensation depending on occupation and time preferences

Asymmetric information and middleman margins: an experiment with indian potato farmers

West Bengal potato farmers cannot directly access wholesale markets and do not knowwholesale prices. Local middlemen earn large margins; pass-through from wholesale to farmgate prices is negligible. When we informed farmers in randomly chosen villages about wholesale prices, average farmgate sales and prices were unaffected, but pass-through to farmgate prices increased. These results can be explained by a model where farmers bargain ex post with village middlemen, with the outside option of selling to middlemen outside the village. They are inconsistent with standard oligopolistic models of pass-through, search frictions, or risk-sharing contracts.We acknowledge grants from the Hong Kong Research Grants Council, the International Food Policy Research Institute in Washington DC, the International Growth Centre at the London School of Economics, the Hong Kong Research Grants Council, and USAID's Development Innovation Ventures program. We are grateful to three anonymous referees, Abhijit Banerjee, Francesco Decarolis, Jordi Jamandreu, Dan Keniston, Asim Khwaja, Kaivan Munshi, Rohini Pande, Marc Rysman, Chris Udry, and participants at several seminars and conferences. We received excellent research assistance from Khushabu Kasabwala, Prathap Kasina, Arpita Khanna, Clarence Lee, Owen McCarthy, Sanyam Parikh, Moumita Poddar, Sunil Shoo, and Ricci Yeung. All errors are our own. (Hong Kong Research Grants Council; International Food Policy Research Institute in Washington DC; International Growth Centre at the London School of Economics; USAID's Development Innovation Ventures program)Accepted manuscrip

Financing smallholder agriculture: an experiment with agent-intermediated microloans in India

We explore the hypothesis that traditional joint-liability microfinance programs fail to increase borrower incomes in part because they cannot screen out unproductive borrowers. In randomly selected villages in West Bengal, India, we implemented trader-agent-intermediated lending (TRAIL), in which local trader-lender agents were incentivized through repayment-based commissions to select borrowers for individual liability loans. In other randomly selected villages, we organized a group-based lending (GBL) program in which individuals formed 5-member groups and received joint liability loans. TRAIL loans increased the production of the leading cash crop by 27% and farm incomes by 22%. GBL loans had insignificant effects. We develop and test a theoretical model of borrower selection and incentives. Farmers selected by the TRAIL agents were more able than those who self-selected into the GBL scheme; this pattern of selection explains at least 30–40% of the observed difference in income impacts.Accepted manuscrip

Believing in oneself : can psychological training overcome the effects of social exclusion?

This paper examines whether psychological empowerment can mitigate mental constraints that impede efforts to overcome the effects of social exclusion. Using a randomized control trial, we study a training program specifically designed to reduce stigma and build self-efficacy among poor and marginalized sex workers in Kolkata, India. We find positive and significant impacts of the training on self-reported measures of efficacy, happiness and self-esteem in the treatment group, both relative to the control group as well as baseline measures. We also find higher effort towards improving future outcomes as measured by the participants’ savings choices and health-seeking behaviour, relative to the control group. These findings highlight the need to account for psychological factors in the design of antipoverty programmes

Cash versus in-kind transfers: what do beneficiaries really want?

Maitreesh Ghatak, Chinmaya Kumar, and Sandip Mitra examine the factors that determine whether beneficiaries prefer receiving in-kind or cash transfers

AmicroN: A Framework for Generating Annotations for Human Activity Recognition with Granular Micro-Activities

Efficient human activity recognition (HAR) using sensor data needs a significant volume of annotated data. The growing volume of unlabelled sensor data has challenged conventional practices for gathering HAR annotations with human-in-the-loop approaches, often leading to the collection of shallower annotations. These shallower annotations ignore the fine-grained micro-activities that constitute any complex activities of daily living (ADL). Understanding this, we, in this paper, first analyze this lack of granular annotations from available pre-annotated datasets to understand the practical inconsistencies and also perform a detailed survey to look into the human perception surrounding annotations. Drawing motivations from these, we next develop the framework AmicroN that can automatically generate micro-activity annotations using locomotive signatures and the available coarse-grain macro-activity labels. In the backend, AmicroN applies change-point detection followed by zero-shot learning with activity embeddings to identify the unseen micro-activities in an unsupervised manner. Rigorous evaluation on publicly available datasets shows that AmicroN can accurately generate micro-activity annotations with a median F1-score of >0.75. Additionally, we also show that AmicroN can be used in a plug-and-play manner with Large Language Models (LLMs) to obtain the micro-activity labels, thus making it more practical for realistic applications.Comment: 27 pages, 5 tables, 9 figure

Learning from Singur: land acquisition and compensation in India

A recent paper by Maitreesh Ghatak, Sandip Mitra, Dilip Mookherjee and Anusha Nath calls for well-informed and flexible ways of compensating displaced landowners to ensure fast growth along with an equitable distribution of its benefits in India