[séminaire CREM] The Future in Mind: Aspirations and Future-Oriented Behaviour in Rural Ethiopia

Co-écrit avec Stefan Dercon, Kate Orkin, Giulio Schinaia et Alemayehu Seyoum Taffesse

Abstract:
People living in deprivation may not make long term investments if they doubt that a better life is possible. In a randomised control trial in remote, rural Ethiopia, we test if changing how people perceive their future opportunities alters investment. We show a treatment group video documentaries about the lives of role models from similar communities who escaped poverty through their own efforts in agriculture or nbusiness. Five years later, treated household heads report higher labour supply, more use of agricultural inputs and increased education spending. They have accumulated more assets, their children have attained more years of schooling, and they have increased asset wealth, housing quality and food security. We provide evidence consistent with the mechanism being an increase in aspirations. We outline a simple model of household consumption and production with reference-dependent utility, in which aspirations are defined as reference points for consumption and meeting aspirations yields utility over and above the utility of consumption. In such a model, changes in reference points increase effort and investment. We also show in survey data that individuals in treated households report higher aspirations -- hopes for the level of income and assets they hope to attain - straight after screening and after five years. Furthermore, exposure to video of outsiders and other psychological mechanisms are unlikely to account for effects: a placebo group shown a local entertainment programme are unaffected, and there are no effects of treatment on preferences, social norms and other psychological characteristics. Exploiting randomised intensity of treatment between villages, we find little evidence of aspirations or behaviour change being transmitted between households, suggesting such interventions may need to reach individuals directly.