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Understanding the average impact of microcredit expansions: a Bayesian hierarchical analysis of seven randomized experiments

Meager, Rachael (2019) Understanding the average impact of microcredit expansions: a Bayesian hierarchical analysis of seven randomized experiments. American Economic Journal: Applied Economics, 11 (1). pp. 57-91. ISSN 1945-7782

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Identification Number: 10.1257/app.20170299

Abstract

Despite evidence from multiple randomized evaluations of micro- credit, questions about external validity have impeded consensus on the results. I jointly estimate the average effect and the heterogeneity in effects across seven studies using Bayesian hierarchical models. I find the impact on household business and consumption variables is unlikely to be transformative and may be negligible. I find reasonable external validity: true heterogeneity in effects is moderate, and approximately 60 percent of observed heterogeneity is sampling variation. Households with previous business experience have larger but more heterogeneous effects. Economic features of microcredit interventions predict variation in effects better than studies’ evaluation protocols.

Item Type: Article
Additional Information: © 2018 American Economic Association
Divisions: Economics
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HC Economic History and Conditions
H Social Sciences > HG Finance
JEL classification: D - Microeconomics > D1 - Household Behavior and Family Economics > D14 - Personal Finance
G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
I - Health, Education, and Welfare > I3 - Welfare and Poverty > I38 - Government Policy; Provision and Effects of Welfare Programs
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O16 - Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
P - Economic Systems > P3 - Socialist Institutions and Their Transitions > P34 - Financial Economics
P - Economic Systems > P3 - Socialist Institutions and Their Transitions > P36 - Socialist Institutions and Their Transitions: Consumer Economics; Health, Education and Training, Welfare, and Poverty
Sets: Departments > Economics
Date Deposited: 05 Jun 2018 15:31
Last Modified: 13 Oct 2019 23:02
URI: http://eprints.lse.ac.uk/id/eprint/88190

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