The curse of low expectations

One of the most provocative and interesting field experiments I’ve seen in this year:

Poor people often do not make investments, even when returns are high. One possible explanation is that they have low aspirations and form mental models of their future opportunities which ignore some options for investment.
This paper reports on a field experiment to test this hypothesis in rural Ethiopia. Individuals were randomly invited to watch documentaries about people from similar communities who had succeeded in agriculture or business, without help from government or NGOs. A placebo group watched an Ethiopian entertainment programme and a control group were simply surveyed.
…Six months after screening, aspirations had improved among treated individuals and did not change in the placebo or control groups. Treatment effects were larger for those with higher pre-treatment aspirations. We also find treatment effects on savings, use of credit, children’s school enrolment and spending on children’s schooling, suggesting that changes in aspirations can translate into changes in a range of forward-looking behaviours.

By Tanguy, Dercon, Orkin, and Taffesse.

I’ve been reading a lot on the economic theory and evidence on personality, identity, and mental models of the self. If I had to recommend three things:

A field experiment on character and identity/value change in Liberia, and how it related to crime, violence, and poverty, should be share-able soon.

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