There is a small Twitter fad going around recently, it goes something like this:
“What do you do?”
“I’m an economist.”
“Oh, cool! I’ve been thinking about making some investments, any advise?”
“I’m not that kind of economist. I’m a development economist who studies poverty alleviation in Africa.”
“Ah, okay. I’ve never been to that country.”
We have all (probably) had interactions like this. Most academic fields (and economics is certainly no exception) seem esoteric to those who do not work in that particular field. This reality is almost axiomatically true. The academic study of anything pushes the boundaries of knowledge of a particular topic. Therefore, by definition, not many people are going to know much about the field, much less be able to ask intelligent questions about day-to-day academic work.
To be clear: I am not criticizing anyone who has posted a variation of this Tweet in recent days. I certainly have had my share of frustrating conversations with people who have no interest in carrying on a conversation after hearing how I spend my working hours.
Here is my point: Rather than using these Tweets to make latent statements about our relative intelligence, I think the existence of conversations like these highlight a failure to communicate our research well to the general public. There are certainly issues with demand for high-quality and thoughtful research insights about economics among the general public, but we are kidding ourselves if we think there is no problem with the supply of digestible research insights for intelligent individuals outside of our particular field of study.
So, here is a counter-example to the Twitter-fad, from a recent interaction. I am not saying I aways do this perfectly (or even well at all), but if we all put a little bit more effort into communicating cutting-edge research well, I think we can turn a few more conversations like the one above to the one below.
“What do you do?”
“I’m a PhD student studying development economics. My research focuses mostly on understanding the impacts of various policies and programs designed to help alleviate poverty and promote widespread economic development. What do you do?”
“I’m a MBA student. I am actually writing a paper for a class right now on microfinance. Do you have any suggestions of resources that I can use to learn more about this topic?”
We exchanged emails and low-and-behold this person followed up and I sent something similar to this in response:
Here are a few of the “best” (e.g. most important) studies on micro-finance that I am aware of. There are certainly other equally as important studies, but this should give you a good start. I’ll add a bit about each article in the email here. If you have any follow-up questions on any of these papers, I’d be happy to discuss any of them in more detail. Also, a note about reading applied microeconomics papers: Focus on reading the abstract, introduction, and conclusion. Look at the tables and figures. Don’t worry too much about all of the details in the middle. Generally speaking, reading any of these papers all the way through – from start to finish – is not advised.
(1) Pitt and Khandker (JPE 1998) – This is the first formal study of the impact of participating in the Grameen Bank program in Bangladesh. The authors estimate huge impacts of participating in micro-credit. Almost nobody believes the results of this study today.
(2) Banerjee, Karlan, and Zinman (AEJ: Applied 2015) – This is the introductory article of a special issue of the American Economic Journal: Applied that simultaneously published six randomized control trials studying the impact of microcredit in different settings around the developing world. The headline finding across each of these studies is that microcredit, on average, does not lead to transformative impacts (as was once thought by some). Although this is a great intro article, each of the six studies have their own paper and are available at this link.
(3) Breza and Kinnan (NBER 2018) – All of the studies above, look at what happens when people gain access to microcredit. What happens when they loose access? Due to a unfortunate policy in Andhra Pradesh, India this paper studies the impact of a state policy that abruptly banned microcredit. They find significant decreases in wages, earnings, and consumption. So, while offering microcredit may not pave a road out of poverty for everyone, access to affordable credit seems to be an important part of the solution.
(4) Roodman and Morduch (JDS 2014) – A re-analysis of the data and results of Pitt and Khandker (1998). The authors find that the original results disappear after dropping outliers or when using alternative estimation approaches.
(5) Ashraf, Karlan, and Yin (QJE 2006) – All of the above study microcredit. What about micro-savings? This is a fascinating study that offers poor households in the Philippines a savings product that really only makes sense if people know they suffer from commitment problems. A large share used the product and experienced a substantial increase in savings.
(6) Dupas, Karlan, Robinson, and Ubfal (AJE: Applied 2018) – What happens when access to basic bank accounts is expanded to the poor? In a study across three countries the authors show that polices that only provide access to basic bank accounts are unlikely to improve welfare among the poor in developing countries. Also see a very recent blog post on this paper here.
(7) Cull, Demirguc-Kunt, and Morduch (WBER 2018) – Finally, a nice review article that takes a step back and discusses how might the micro-finance business model be tweaked to lead to more cost effective outcomes.
I hope this is helpful and not too overwhelming. Best of luck with the paper.