Information asymmetries are a well-recognized impediment to market efficiency. When quality is not observable by prospective buyers, the quality of marketed goods will suffer, and the volume of trade will be depressed. Using data from more than 2,000 maize samples collected in four Kenyan provinces, we show that the presence of aflatoxin, an invisible and dangerous fungal contaminant, is not re...

This paper develops a theory of informal insurance in the presence of an intertemporal technology. It is shown that when an insurance agreement suffers from enforcement problems, constraints on individual savings behaviour can enable the group to sustain greater cooperation. This result provides a motivation for a variety of social norms observed in traditional societies which discourage ‘exces...

Constrained Firms, Not Subsistence Activities: Evidence on Capital Returns and Accumulation in Peruvian Microenterprises We investigate the returns to capital and capital accumulation using panel data of Peruvian micro enterprises (MEs). Marginal returns to capital are found to be very high at low levels of capital, but rapidly decreasing at higher levels. The dynamic analyses of capital accumu...

Reverse share tenancy, i.e., sharecropping between a poor landlord and a rich tenant, is common throughout the developing world. Yet it can only fit the canonical principal-agent model of sharecropping under specific circumstances. This paper develops and tests between three theoretical explanations for reverse share tenancy based respectively on (i) risk-aversion on the part of both the landlo...

Are Workers in the Cultural Industries Paid Differently? Wage differentials between three sub-industries of the cultural industries and their respective main industry: The case of the Netherlands This paper aims to explore wage differentials between employees in three sub-industries of the cultural industries compared with the main (1-digit level) industry to which they belong. We use data from...

The assumption that remittances are a substitute for credit has been an implicit or explicit theoretical foundation of many empirical studies on remittances. This paper directly tests this assumption by comparing the response to health-related shocks among national and transnational households using panel data from Mexico for 2002 and 2005. While the occurrence of serious health shocks that req...

This paper examines the macroeconomic and structural constraints to scaling up aid fl ows to developing countries to meet the Millennium Development Goals in 2015, including infrastructure, competitiveness and the real exchange rate, labour markets, fi scal constraints, governance, and aid volatility and fragmentation. The impact of these constraints on cost-effi cient sequencing and compositio...

mArch 2017 IZA DP No. 10674 Do Friendship Networks Improve Female Education?* We randomly assign more than 6,000 students from 150 primary schools in Bangladesh to work on math assignments in one of three settings: individually, in groups with random schoolmates, or in groups with friends. The groups consist of four people and are balanced by average cognitive ability and ability distribution. ...

Using panel data spanning 15 years, this paper investigates the persistence and correlates of subjective and consumption poverty in urban Ethiopia. Despite the decline in consumption poverty in recent years, which has been linked to rapid economic growth, subjective poverty has remained largely unchanged. Dynamic probit regression results show that households with a history of past poverty cont...