Publications by PSE researchers

We study the role of social learning in the diffusion of cash crops in a resettled village economy in Brazil. We combine detailed geo-coded data on farming plots with dyadic data on social ties among settlers, and we leverage the variation in network formation induced by the landless workers' movement land occupation. By using longitudinal data on farming decisions over 15 years, we find evidence of significant peer effects in the decision to farm new cash fruits (pineapple and passion fruit). Our results suggest that social diffusion is heterogeneous along observed plot and crop characteristics, i.e. farmers growing water-sensitive crop are more likely to respond to the actions of peers with similar water access conditions.

This paper studies how formal financial access affects network-based financial arrangements. We use a field experiment that granted access to a savings account to a random subset of households in 19 Nepalese villages. Exploiting a unique panel dataset that follows all bilateral informal financial transactions before and after the intervention, we show that households that were offered access to an account increased their loans and total transfers to others, independent of the treatment status of the receiver. The increase seemed to be driven by treatment households with more assets and greater financial inclusion at baseline.

Networks may rewire in response to interventions. We propose a measure of the treatment effect when an intervention affects the structure of a social network. We develop a treatment-response model that incorporates dynamic peer effects and provide its identification conditions and the associated instrumental-variable strategy. We illustrate our estimation procedure using a panel dataset containing information on a financial network before and after a field experiment that randomized access to savings accounts. Results show that neglecting the network change results in underestimation of the impact of the intervention and the role played by informal networks through which the intervention diffuses.

La vie quotidienne est le cadre d’interactions personnelles et professionnelles qui constituent l’un des moteurs du comportement et du succès de chacun. M. Comola nous propose de parcourir des situations diverses – recherche d’emploi, transmission d’informations, usage des plateformes numériques, recours aux technologies, mécanismes d’assurance, commerce ou encore discrimination sociale – dans lesquelles ce sont les liens sociaux qui font la différence entre la réussite et l’échec. On constate alors que ces liens, loin de se limiter à la sphère privée, acquièrent une dimension économique qu’il convient de mettre au coeur du débat public.

We design a laboratory experiment to investigate matching in a decentralized market of deferred acceptance. Agents are undifferentiated and may have multiple partners; their payoff depends on who they match with. The experiment is designed in such a way that a stable configuration exists, but cannot be eyeballed by the participants due to the computational complexity of the game. In spite of this, subjects are remarkably good at reaching a stable match, even when the payoffs of others are not publicly observed. More information does, however, speed up convergence thanks to self-censoring. We trace irrational matching choices mostly to two sources: the tendency of over-think in a setting where strategic thinking is not necessary, and the reluctance to accept matching offers from those who have been disloyal in the past.

Many studies have used self-reported dyadic data without exploiting the pattern of discordant answers. In this article we propose a maximum likelihood estimator that deals with misreporting in a systematic way. We illustrate the methodology using dyadic data on interhousehold transfers from the village of Nyakatoke in Tanzania. We show that not taking reporting bias into account leads to serious underestimation of the total amount of transfers between villagers. We also provide suggestive evidence that reporting bias can affect inference about estimated coefficients. The method introduced here is applicable whenever the researcher has two discordant measurements of the same dependent variable.

In this paper, we provide the first direct evidence on the internal structure of the migrant social network. By using a purposely designed survey on Sri Lankan immigrants living in Milan, we show that the pattern of within-group link formation is heterogeneous across immigrants, and differentiated according to the network function (i.e., accommodation, credit, job-finding). We find that migrants tend to interact with co-nationals who come from nearby localities at origin, while the time of arrival has a U-shaped effect. Once the link is formed, material support is provided mainly to relatives, while early migrant fellows are helpful for job-finding. [ABSTRACT FROM AUTHOR]

Empirical analysis of social networks is often based on self-reported links from survey data. How we interpret such data is crucial for drawing correct inference on network effects. We propose a method for testing whether survey responses can safely be interpreted as a link and, if so, whether links are generated by a unilateral or bilateral link formation process. We present two empirical illustrations of the test on risk-sharing links in Tanzania and on communication among Indian farmers, respectively, demonstrating the ability of the methodology to discriminate between competing data-generating processes.

There is strong evidence that subjective well-being measures capture in a reliable way specific components of well-being that other non-subjective measures miss. The question of whether subjective well-being is policy amenable is however still largely unexplored in the research. This paper sheds some light on this issue, by looking at the impact of selected labour market and health policies on subjective well-being, using well-being data from the Gallup World Poll on the 34 OECD countries. The paper finds that the generosity of unemployment benefits and the strictness employment protection legislation affects positively life satisfaction, while out-of-pocket health expenses significantly reduce subjective well-being.

This article uses household survey data to estimate the determinants of earnings in Indonesia, a country where nonsalaried work is widespread and earnings data are available for salaried employees only. We deal with the selection bias by estimating a Full-Information Maximum Likelihood (FIML) system of equations, where selection into the labour market is modelled in a multinomial setting. We find that some estimated parameters of the earnings equation differ from a binomial selection procedure by Heckman (1979), in particular for those variables with the strongest impact on the selection into the different labour-market statuses. However, the estimated returns to education are unaffected, even when we deal with the endogeneity of educational attainment following Duflo (2001). Overall, our findings show that the choice of the selection rule affects the estimates of the earnings determinants in the Indonesian labour market.

Throughout the 20th century arms have not only been tradable goods, but also policy instruments. This paper focuses on countries supplying major conventional weapons (MCW), and investigates whether changes in political conditions impact the quantity of MCW supplied to third countries. In particular, it concentrates on democratic exporters and estimates a gravity-type panel tobit for the years 1975-2004. Results suggest that the exporter's chief executive, being right-wing, has a positive and significant impact on MCW exports. This may reflect a general right-wing tendency to support national industry and deregulate heavy industry exports. It is also found that higher concentration of power is associated with lower MCW exports, and that executives which serve the last year of their term and can run for re-election tend to decrease MCW exports.