Model Selection in Stochastic Frontier Analysis: Maize Production in Kenya

We demonstrate how a recently developed model selection procedure can be used to choose among competing stochastic frontier models where inefficiency depends on firm characteristics. We provide evidence on the power of this procedure. Moreover, we examine the effects of model choice on estimation results. We find that different models can lead to rather different magnitudes of the partial effects of the exogenous factors. However, because the model selection procedure gives an unambiguous choice of best model, and because bootstrapping indicates that the procedure is reliable, we conclude that it does not matter whether other models give different results.Research Methods/ Statistical Methods,

Girls take over: Long-term impacts of an early stage education intervention in the Philippines

This paper examines the long-term impacts of improved school quality at the elementary school stage on subsequent schooling investments and labor market outcomes using unique data from a recent survey that tracked students in the Philippines. Empirical results, based on a comparison of students who graduated from treatment and control schools before and after a school intervention, show significant differences in subsequent schooling investments, migration, and labor market earnings between females and males. That is, females study more (relative to males) and tend to migrate and earn more if they receive high-quality educational investments at an early stage. The above results are consistent with females' greater incentives to study, driven by their higher returns to schooling, especially after high school completion, observed in the labor market.Gender, labor markets, School quality, tracking survey,

Impacts of an early education intervention on students' learning achievement: Evidence from the Philippines

This paper examines the impact of a large supply-side education intervention in the Philippines, the Third Elementary Education Project, on students' national achievement test scores. We find that the program significantly increased student test scores at grades 4 to 6. The estimate indicates that the six-year exposure to the program increases test scores by about 15 score points. Interestingly, the mathematics score is more responsive to this education reform than other subjects. We also find that textbooks, instructional training of teachers, and new classroom constructions particularly contributed to these outcomes. The empirical results also imply that early-stage investments improve student performance at later stages in the elementary school cycle, which suggests that social returns to such an investment are greater than what the current study demonstrates.School quality, policy intervention, elementary schools, human capital formation,

Economic and social impacts of self-help groups in India

Although there has been considerable recent interest in micro-credit programs, rigorous evidence on the impacts of forming self-help groups to mobilize savings and foster social empowerment at the local level is virtually non-existent, despite a large number of programs following this pattern. The authors use a large household survey to assess the economic and social impacts of the formation of self-help groups in India. They find positive impacts on empowerment and nutritional intake in program areas overall and heterogeneity of impacts between members of pre-existing and newly formed groups, as well as non-participants. Female social and economic empowerment in program areas increased irrespective of participation status, suggesting positive externalities. Nutritional benefit was more pronounced for new participants than for members of pre-existing groups. Evidence of higher consumption - but not income or asset formation - by participants suggests that at the time of the survey, the program's main economic impact had been through consumption smoothing and diversification of income sources rather than exploitation of new income sources. Evaluation of such programs in ways that allow heterogeneity of program impact can yield highly policy-relevant insights.Access to Finance,Housing&Human Habitats,Social Accountability,Poverty Monitoring&Analysis,

Determinants of repayment performance in Indian micro-credit groups

Despite their potential importance and ease of modification, impacts of monitoring and loan recovery arrangements on micro-credit groups'repayment performance have rarely been studied. Data on 3,350 expired group loans in 300 Indian villages highlight that regular monitoring and audits, high repayment frequency, consumption smoothing support through rice credit, and having group savings deposited with the lender all significantly increase repayment rates. Estimated magnitudes of their effects vastly exceed those of members'socio-economic characteristics. Significantly lower repayment on loans originating in externally provided grant resources suggests that stringent monitoring will be essential for these to have a sustainable impact.Access to Finance,Debt Markets,,Bankruptcy and Resolution of Financial Distress,Strategic Debt Management

Longer-term economic impacts of self-help groups in india

Despite the popularity and unique nature of women's self-help groups in India, evidence of their economic impacts is scant. Based on two rounds of a 2,400 household panel, the authors use double differences, propensity score matching, and pipeline comparison to assess economic impacts of longer (2.5-3 years) exposure of a program that promoted and strengthened self-help programs in Andhra Pradesh in India. The analysis finds that longer program exposure has positive impacts on consumption, nutritional intake, and asset accumulation. Investigating heterogeneity of the impacts suggests that even the poorest households were able to benefit from the program. Furthermore, overall benefits would exceed program cost by a significant margin even under conservative assumptions.Access to Finance,,Rural Poverty Reduction,Poverty Monitoring&Analysis,Debt Markets

Determinants of microcredit repayment in federations of Indian self-help groups

Since the establishment of the Grameen Bank in Bangladesh in 1976, microfinance has boomed. As of December 31, 2007, 3,552 microcredit institutions had reached 154 million clients worldwide, about 106.6 million of whom were among the poorest when they took their first loan. Such expansion can be at least partly attributed to the widely adopted practice of group lending in microfinance programs. In contrast to individual lending, group lending (or joint liability) grants a loan to a group of borrowers, and the whole group is liable for the debt of any individual member in the group. This practice allows microfinance programs to rely mainly on accountability and mutual trust among group members rather than financial collateral to insure against default. Given that the poor often lack appropriate financial collateral, group lending programs offer a feasible way of extending credit to poor people who are usually kept out of traditional banking systems. There is considerable debate about whether such groups can be sustainable, achieving sound repayment performance while serving poor borrowers. The factors affecting repayment performance are thus of great policy relevance. This brief examines whether and how much repayment is affected by three factors: the source of the loan, groups’ provision of public goods in the form of insurance substitutes, and the monitoring and repayment rules of the federations of groups. The data come from more than 2,000 self-help groups (SHGs), federated in 299 village organizations in the Indian state of Andhra Pradesh. The SHGs under study were supported by a large World Bank program called the Indira Kranti Patham (IKP) program, with a cost of US$260 million. The program has been replicated in other states in India and may be replicated in other countries. A better understanding of factors influencing repayment will therefore help improve the performance and advance of the program.Indira Kranti Patham (IKP) program, Micro-credit programs., self-help groups (SHGs),

A degree theory for second order nonlinear elliptic operators with nonlinear oblique boundary conditions

In this paper we introduce an integer-valued degree for second order fully nonlinear elliptic operators with nonlinear oblique boundary conditions. We also give some applications to the existence of solutions of certain nonlinear elliptic equations arising from a Yamabe problem with boundary and reflector problems

Economic and Social Impacts of Self-Help Groups in India

We use a combination of pipeline comparison, propensity score matching, and double differences to evaluate economic and social impacts of a large community driven development program in India. While we find positive empowerment and nutritional effects for households in program areas, allowing heterogeneity of program impact yields additional insights. First, social and economic empowerment increased equally for participants and non-participants in program areas, pointing towards positive externalities. Second, nutritional benefits were more pronounced for new participants than for members of pre-existing self-help groups who joined the program. Third, evidence of higher consumption -but not income or asset formation- by new and converted participants suggests that at the point of the survey, the program's main economic impact had been through consumption smoothing and diversification of income sources.Food Security and Poverty,

A TWO-SHOCK MODEL OF THE IMPACT OF CROP INSURANCE ON INPUT USE: ANALYTIC AND SIMULATION RESULTS

By altering the probability distribution of farm income, crop insurance programs affect farmer's input use decision. Ramaswami's (1993) one-shock model analyzed the effect of the crop insurance on single input use by allowing the randomness of yield while keeping price constant in revenue determination. The total effect of actuarially fair insurance on input use was decomposed into risk reduction effect and moral hazard effect, and the directions of the two effects were examined. He showed that the total impact of actuarially fair crop insurance on input use was a) to reduce it if the input was risk decreasing and b) indeterminate if the input was risk increasing. However, the evidence from previous empirical work has been mixed. Horowitz and Lichtenberg (1993) suggested insured farmers raising corn use more fertilizers and pesticides while Smith and Goodwin (1996) obtained the opposite result for wheat. Smith and Goodwin also used more comprehensive econometric tests and had a higher quality data set. A common belief is that fertilizer is risk increasing and pesticide risk decreasing. Ramaswami's model assumed crop price was constant and yield was the only source of randomness in farmer's revenue. In reality, market price is a random variable and often negatively correlated with the farmer's yield. For example, bad weather conditions tend to reduce yield across farms in a common region, which may cause diminished quantities supplied and higher crop price. Our paper extends Ramaswami's one-shock model to a two-shock model, and generalizes the two propositions in that paper by introducing randomness to price as well as yield. With two random shocks, the total insurance effect on input use is indeterminate for both risk increasing and risk decreasing inputs, which is consistent with the mixed empirical evidence. Our study also provides a numerical method to decompose the total insurance effect into a risk reduction effect and a moral hazard effect using empirical data. The simulation based on 75 percent coverage level suggests the total insurance effect is economically small to the farmer as are the risk reduction effect and moral hazard effect under mild risk aversion. And the moral hazard effect is less significant than the risk reduction effect. However, the moral hazard effect becomes larger if a higher coverage level is used.Risk and Uncertainty,