We utilize a unique pair of experiments to isolate the ways in which reductions in asymmetric information alter credit market outcomes. A Guatemalan microfinance lender gradually started using a credit bureau across its branches without letting borrowers know about it. One year later, we ran a large randomized credit information course that described the existence and workings of the bureau to the clients of this lender. This pairing of natural and randomized experiments allows us to separately identify how new information enters on the supply and the demand sides of the market. Our results indicate that the credit bureau generated large efficiency gains for the lender, and that these gains were augmented when borrowers understood the rules of the game. The credit bureau rewarded good borrowers but penalized weaker ones, increasing economic differentiation.

Understanding the economic impact of surface temperatures is an important question for both economic development and climate change policy. This study shows that in 28 Caribbean-basin countries, the response of economic output to increased temperatures is structurally similar to the response of labor productivity to high temperatures, a mechanism omitted from economic models of future climate change. This similarity is demonstrated by isolating the direct influence of temperature from that of tropical cyclones, an important correlate. Notably, output losses occurring in nonagricultural production (–2.4%/+1 °C) substantially exceed losses occurring in agricultural production (–0.1%/+1 °C). Thus, these results suggest that current models of future climate change that focus on agricultural impacts but omit the response of workers to thermal stress may underestimate the global economic costs of climate change.

The role of agriculture as an instrument for industrialization had been rigorously conceptualized in the 1960s and 1970s under the classical paradigm of development economics. After many implementation failures under import substitution industrialization policies and protracted neglect of agriculture under the policies of the Washington Consensus that followed the debt crisis, agriculture has gradually returned in the development agenda, especially with the food crisis. We argue in this article that a new paradigm has started to emerge as to how to use agriculture for development, pursuing a broadened development agenda. We explore the specifications of this paradigm and discuss conditions for successful implementation.

Empirical evidence has shown that off-farm non-agricultural (OFNA) employment offers a major pathway from poverty for rural populations. However, the pattern of participation in these activities is heterogeneous across categories of individuals and poorly understood. We explore the role of spillovers from peers on an individual’s participation in formal and informal OFNA employment using village census data for rural Mexico. We test and reject the possibility that peers’ decisions could be proxying for unobserved individual, village-level, or individual-type effects. We find that peers’ participation in OFNA employment has a large impact on an individual’s ability to engage in this type of employment, both formal and informal, even after controlling for
individual attributes and village characteristics. Peer effects are structured by similarities in gender, ethnicity, educational level, and land endowment. We find that marginal peer effects tend to be stronger for categories of individuals that are already more engaged in OFNA employment, such as men, non-indigenous people, the more educated, and the landless, contributing to reinforcing inequalities in accessing these jobs. However, the role of peer effects relative to that of education in obtaining formal OFNA employment is more important for members of groups that are less engaged in these jobs, such as women, indigenous people, the less educated, and smallholders.

We conducted a randomized experiment at the time of the 2004 flu vaccine shortage, providing information about the sharply reduced number of clinics and their schedule, and an appeal on cooperative restraint to a campus population. This strategy was intended to reduce demand for vaccination among non-priority individuals and to free available supplies for the priority population. It failed to achieve its purpose. Information induced a net increase in vaccines distributed and, perversely, the net increase originated entirely in non-priority individuals. The surprising finding is that calls on cooperative restraint induced an uncalled for positive response among priority individuals, while they induced an increase in cheating among non-priority individuals. Age as a qualifying factor was in particular widely abused, with the number of “65 years old” more than twice the predicted value, while about half of the predicted 61-64 years old were missing.