Aspirations and Real Estate Investment in Rural Myanmar — New Working Paper

Aspirations, or future-oriented goals, influence how we make choices in the present. In recent years, development economists have developed a particular interest in the way aspirations influence human behavior. The figure below plots my calculation of the number of published articles that mention “aspirations” cataloged in the EconLit database from 1956 through 2016.

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Myanmar’s Religious Problem

What the Red Sox – Yankees Rivalry Can Teach Us About Political Polarization Quote: “I can hate the Yankees, feel wronged that Tom Brady is benched for a few games, and make the absurd claim that I would be very upset if my sons married Yankees fans. In sports, irrational partisan feelings are permissible because the stakes are so low. Irrational partisan emotions clearly exist in politics, too, but in politics we should be ashamed of them.”

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A Quantitative Measure of Hope: A working paper

Over the past year an a half I’ve been working as a Research Assistant with the Feed the Future Innovation Lab for Food Security Policy – Burma. Housed at Michigan State University, the project is generously funded by USAID’s Bureau of Food Security. It has been a tremendous experience. I’ve traveled to Myanmer twice (see blog posts and pictures here, here, and here), I’ve provided technical support for both rural household survey administration and calculating price volatility, and was able to create and implement my own survey aiming to quantitatively measure a concept commonly known as hope.

This work on measuring hope is what ultimately became my MS Thesis. I’ve written quite a bit about this work. First in the Economics That Really Matters blog, then in the Global Food For Thought blog, and in USAID’s Agrilinks blog, along with many other of my own blog posts along the way. This was my first real academic research project that I was able to oversee from start to finish. It was a lot of work, but an experience I found out that I particularly enjoy.

You can find my entire MS Thesis posted on the MSU AFRE website. As is often the case with these things, the Thesis itself became quite long. So since its completion, I’ve been trying to break the whole document down into shorter, more journal-style papers. I’m happy to say, I’ve succeeded on one such paper so far:

Measuring Hope: A Quantitative Approach with Validation in Rural Myanmar. Here is the abstract:

Development economists are increasingly paying attention to the role of hope in observed behaviors relating to investment, production, and consumption decisions of the poor. Although several studies have examined how the concepts of hope and aspirations may fit into existing economic theories, empirical studies have yet to validate a reliable approach to measure hope. This paper seeks to fill this gap by adapting a quantitative approach to measure hope, developed by psychologists, to the context of rural Myanmar. We present three empirical tests of measurement validity. This study finds that the hope measurements seem to be correlated with expected determinants in a way supported by theory, are similar but distinct from other psychological concepts, and are positively correlated with welfare perceptions. This study provides an initial foundation for viable and reliable quantitative measurements of hope in developing countries and identifies future avenues of research to improve the measurement of hope.

We’ve just submitted this paper to a journal, but if anyone has any comments or feedback, my co-author and I would love to hear them.

Data Collection in Developing Countries… Stories from the Field

Consider the following unrelated facts:

  • About 1 in every 19 Kenyan children dies before his or her fifth birthday.
  • Only 9 percent of health facilities in Bangladesh offer diagnostic services for tuberculosis.
  • The percentage of households in Uganda owning at least one insecticide-treated anti-malarial net increased from 16 percent in 2006 to 90 percent in 2014-2015.

Our first reaction to numbers like these is to imagine what they imply for the lives of people in those countries. But there’s another dimension to the statistics that’s easy to overlook: someone had to go to the field and collect the underlying data. Behind each of these neatly summarized findings (from the U.S. Agency for International Development’s Demographic and Health Surveys (DHS) program) lie stories of personal hardship, risks, and logistical challenges faced by data gatherers—the unsung heroes of international health and poverty research.

This is from a recent article that made the rounds in ‘development Twitter’, which concludes…

Most charities and aid agencies don’t publicize these behind-the-scenes stories, mainly because they see the challenges of working in the field to be an everyday part of the job. But these aren’t everyday jobs. Next time you see health or poverty statistics, or data used to evaluate the effectiveness of charities, take a moment to reflect on the hard work and dedication that must have gone into collecting that information.

I’ll add two short stories. I hope others add more.

The first is from Kenya. I was working on an impact evaluation for an NGO. A local pastor and I were driving around Kitale Kenya and had to drive about an hour out of town to catch up with an individual in our sample. Just as we arrived at the farm the individual owned, a heavy rain began. After performing the survey the individual, refusing to let us leave in the middle of the rain, fead us tea and mandazi. After the rain stopped we returned to our car, which we found had sunken into the mud. We spent roughly the next hour digging our car out of the mud. The road (actually pictured in the header of this blog) leading back to town was long, narrow, and now sufficiently muddy. As we attempted to drive, the car inevitably slid off the side of the road and into the surrounding bushes and ditch. Eventually a fairly large group of kids came and helped guide our car on the center of the road and away from the deep and muddy puddles on each side until we reached a semi-paved road. All told, we spent an entire afternoon just recording one individual’s survey.

The second is from Myanmar. I was working with the Myanmar Development Resource Institute implementing a rural household survey in Mon State, a coastal region close to the boarder with Thailand. The survey was designed to provide statistics that were representative of Mon State. Representative statistics are so essential to modern policy-making that the effort required to collect such data is often glossed over. To collect this data our wonderful research team and enumerators traveled throughout rural Mon State – in cars, but also by boat across water and on foot along rice paddy bunds. Once at the survey location, enumerators tirelessly walked through a 2-3 hour survey covering topics such as assets, agricultural activities, and household consumption. Below are a few pictures from the Mon State Rural Livelihoods Household Survey.

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Myanmar’s Growth, Beyond GDP

The International Monetary Fund (IMF) recently released it’s projections for GDP growth in the year 2016. The country on top of the list? Myanmar. At 8.6%. That’s a lot and is (on the surface) quite encouraging for a country who’s economy pales in comparison to even the economy of it’s neighbor, Thailand. With vast political and economic reforms have come increased consumer confidence, large inflows of foreign direct investment, and a strengthened partnership with “the international community”.

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But, as any economist will tell you GDP is a measurement of economic performance not a measurement of well-being. In fact, rapid economic growth, like what Myanmar is experiencing at the moment, can result in a range of effects on well-being. At the extremes of this range are effects that seem to be opposites of each other. Here is Ghatak, Ghosh, and Kotwal (2014) commenting on the past decade in India:

[2004-2013 was] a period during which growth accelerated, Indians started saving and investing more, the economy opened up, foreign investment came rushing in, poverty declined sharply and building of infrastructure gathered pace . . . [But a] period of fast growth in a poor country can put significant stress on the system which it must cope with. Growth can also unleash powerful aspirations as well as frustrations, and political parties who can tap into these emotions reap the benefits.

If the next decade for Myanmar looks at all like the past decade for India, many would consider this to be a success. As the economy opens up bringing with it accelerated growth, increased foreign investment, large investments in infrastructure, and a sharp decline in poverty on average; questions remain. Will these advancements unleash powerful aspirations or vast frustration? Will the dividends of peace, security, and democracy include the farmers, fishermen, entrepreneurs, and families in the rural areas or will the impacts be contained to the rapidly developing urban areas?

Myanmar Days [Part 3]

I’m back in Myanmar putting the final touches on a household survey on the economics of hope (and this is this blog’s third installment of “Myanmar Days” – parts 1 and 2 here and here).

These days my work is filled with pre-testing and revising, and repeating. Every day. It is challenging and tedious but also entertaining and fun.

One of the key tasks is correctly translating the survey from English into Burmese (technically it’s ‘Myanmar language’, but that’s hard to say). This process, as you many imagine, is quite involved. We spent quite a bit of time the other day thinking about the difference between these two statements: “I am energetically pursuing my goals” and “I am meeting the goals I have set for myself”. After carefully translating the English survey into Burmese the survey is then translated back into English. This allows us to identify instances where the translation is not quite right.

Following this, we go out to local villages and pre-test the survey. This allows us to identify where questions and statements in the survey need to be worded better so that respondents can best understand what our enumerators are asking.

We have received many very interesting reactions to our questions as this survey is a bit unorthodox (as household surveys in developing countries go).

One question in our survey asks how much land does [the respondent] want to own. One older man did not want to answer this question because, as he said, such things are only for children to think about. At risk of reading too far into this statement, I am going to read into this statement.

Perhaps he is saying, as an adult we have to be realistic about our dreams. It is nearly impossible for me to achieve much more land than I currently own (he currently only owned the land on which his house sits). Part of the literature on aspirations in developing countries supports the idea that the experience of living in poverty squelches and prohibits the formation of aspirations (goals and dreams). Perhaps, this is what this man is saying: When I was a child I had dreams of owning lots of land, but now that I’m an adult (who is living amidst life-stealing poverty) I know what is actually possible for people like me and owning more land is simply not achievable. The hope of owning more land is child’s-play.  I’m not certain I have it 100% correct but somewhere in his short answer there is a profound lesson about the reality (and tragedy) of living a life in poverty.

Another man launched into a story: “My life is like that of a gardener”, he said. “I plant many fruits and vegetables but reap almost nothing because pests have destroyed my crop.” (He later made clear, pests were the government.) Another part of hope theory, as developed by social psychologists, is that hope includes a certain amount of personal agency – the belief in ones ability to succeed and accomplish the goals one has set for him or herself. Again, I’ll risk reading too far into this statement: It sounds like this man is stating that no matter how hard he works, his future outcomes are ultimately determined by the “pests” in his life.

Social psychology has developed an idea of “locus of control”. People can be characterized as having either an internal or external locus of control. Meaning, control over the future is within oneself or outside oneself. An external locus of control is thought to be correlated with feelings of hopelessness and leads to low levels of effort in investments or other (so-called) “rational behaviors”. Our survey is focusing on the three ingredients of hope: aspirations, agency, and avenues with validation checks by also asking about the closely related topics of self-efficacy and locus of control. It’s exciting, sobering, sweaty, dusty, challenging, and fun work. Stay tuned for more on this topic.

The pre-test team was invited for a snack at the town-level government office in Paung.

The pre-test team was invited for a snack at the town-level government office in Paung. (Yeah, I’m eating ice cream.)

Aquaculture and Food Security in Rural Myanmar

I work with a wonderful and brilliant team on a USAID funded project in Myanmar. Errm… I mean Burma… (The U.S. government still resists the name change). The team recently wrote a paper on the aquaculture sector in Myanmar. It is a fascinating read, if you’re into this kind of thing… Although I’m not an official co-author of the report, I did copy edit the entire document prior to it’s official release.

Read the whole report here: Aquaculture in Transition: Value Chain Transformation, Fish and Food Security in Myanmar

Here are some take-aways:

1. Fish is super important to Myanmar’s food and nutrition security.

  • Fish is the cheapest form of animal protein in the country.
  • Fish accounts for 50% of animal source food consumed.
  • Fish represents an average food budget share in Myanmar equal to that of rice.

2. Marketed aquaculture products (i.e. farmed fish) are largely inaccessible to the poorest in Myanmar.

  • Aquaculture supplies only 21% of total fish intake.
  • The remaining 79% is supplied by capture fisheries (i.e. fishing with nets in rivers, lakes, and the ocean).

3. Productivity of Myanmar’s aquaculture sector is relatively low

  • Reported yields in Lower Myanmar have a mean of 3.7 t/ha, with a minimum of 1 t/ha and a maximum of 10 t/ha
  • Compare that with Andhra Pradesh, India (a comparable region) which has a mean of 9 t/ha.
  • Myanmar’s production level roughly equals that of India’s Andhra Pradesh in the 1980s.

4. Official statistics of Myanmar’s aquaculture sector are flawed.

  • Production figures are inflated by roughly 160%.
  • Pond use for aquaculture is underreported by roughly 30%.

5. Myanmar’s aquaculture sector is dominated by large firms.

  • An antiquated land use regulation, constraining smallholder farmers from transitioning their farm from rice paddies to fish ponds, still remains from the centralized military regime of the 1980s.
  • While credit systems exist in rural areas, it is generally accepted that smallholder farmers have limited access to formal credit markets.
  • There is room for growth in Myanmar’s aquaculture sector through expanding the production of smallholder fish farms.

Measuring Hope: Lessons from Rural Myanmar [Post-Op Notes]

For those who don’t know, a great new blog about applied development economics was launched last academic year. Managed by some folks over in Cornell’s Dyson School of Applied Economics and Management the “Economics That Really Matters” blog references Theodore Schultz’s 1979 Nobel Lecture when he said the following:

Most of the people in the world are poor, so if we knew the economics of being poor, we would know much of the economics that really matters. Most of the world’s poor people earn their living from agriculture, so if we knew the economics of agriculture, we would know much of the economics of being poor.

I like this quote by Dr. Schultz and I love this new blog.

The blog is typically reserved for graduate students in Cornell’s Applied Economics program (more accurately the folks who make up Chris Barrett’s research group), but this summer the blog was opened up for graduate students from outside of Cornell to write about their research. I took them up on the offer and yesterday they published a piece in which I talk about my recent trip to Myanmar trying to study the economics of hope.

Here’s the article:

As behavioral economics has become the mainstream of economic science, there has been a growing recognition that economic behavior is often influenced by historical experience, social observation, and individual aspirations. A recent demonstration of this can be found in a widely discussed article published last May in Science. Banerjee et al. (2015) speculate about the specific mechanisms driving the results of their evaluation of a multi-dimensional program aiming to ‘graduate’ participants from poverty, saying:

Perhaps this program worked by making beneficiaries feel that they mattered, that the rest of society cared about them, that with this initial help they now had some control over their future well-being, and therefore, the future could become better. (p. 14)

Several other studies have aimed to measure the formation of aspirations in India,Pakistan, Ethiopia, Indonesia, Kenya, and Peru. They all demonstrate something fundamental about human behavior, particularly when surrounded by life-stealing poverty.

Psychologists (see Snyder, 2002 for a summary) say hope is comprised of three elements: aspirations (or some specific goal), avenues (or a visualized pathway toward aspired outcomes), and agency (or a feeling one can attain aspired outcomes). In aworking paper, Travis Lybbert and Bruce Wydick (2015) draw a distinction between wishful hope, which they call “Hope 1,” and aspirational hope, which they call “Hope 2,” Of primary interest to development economists then is “Hope 2,” as aspirations without sufficient agency or avenues could become wishful and relatively inconsequential in economic decision making.

I’ve been part of a team of researchers trying to contextualize this research to Myanmar. The Myanmar Development Resource Institute (MDRI) is a think-tank established to provide independent policy analysis and research related to economic reform, poverty reduction, and improved governance. Michigan State University’s Food Security Groupand IFPRI have partnered with MDRI to provide technical support on an agricultural and livelihood household survey of Mon State (a coastal region close to Thailand in Southern Myanmar).

[READ MORE OF THIS ARTICLE]

International Migration and (you guessed it) Hope

After my last post, my grandpa left the following comment:

My father experienced some of the kind of poverty you write about when he was growing up in the Netherlands. The “hope” factor for him was emigrating to the USA, for which I (and you) owe our very lives…

Thanks grandpa!

This brings up an important point that (a) was backed up by ALL of the households I visited in the rural areas of Myanmar (b) has implications for voters in the United States and other Western nations and (c) for full disclosure, confirms my priors on the topic of immigration.

Migration is the most effective poverty alleviation method on the planet ever. Full stop.

Consider this. I visited households in six villages in one region of Myanmar. We talked to people at random and every household had someone in their family who was living or had lived abroad. Most of the time the family member was in Thailand. It is relatively easy for someone from Myanmar to broker a deal to get into Thailand, even if it is illegal. (I don’t have any evidence to back this up, but it is not difficult to imagine that these desperate migrants would be super-vulnerable to human trafficking.)

One household had a son who had even made it to the United States as a refugee and was working in a fast food restaurant. He was sending back remittances and they were the richest household in their village.

Think about that for a second. Their son is working in the United States in a fast food restaurant (probably making minimum wage in a job most Americans above the age of 17 wouldn’t accept), he sends back his excess income, and they are the richest household in the village…

This story and my own family history demonstrate the transformative power of international migration.

Dani Rodrik (an economist at Harvard) is writing a book on the economic and moral imperative to open our borders. Here are some striking figures:

Letting someone migrate to the West does so much for their wealth, at so little cost to Western workers, that we (the West) have to care about a random person inside our borders five times as much as someone on the other side to justify not letting the outsiders in.

Or we have to value whatever we think we get from closed borders (protecting the culture) so much that we’re willing to deny other human beings a path from poverty.

So here’s the point:

If you’re a regular reader of this blog you’ll remember that psychologists say hope is comprised of three elements that interact and feed off of each other: goals, agency, and pathways. Therefore, if my experience chatting with people from rural villages in Myanmar indicates the true reality, that migration is one of the (if not the only) pathways out of poverty and if we believe hope is an important characteristic to posses, then we have two options:

(1) We should help improve the local situation so that migration isn’t the only viable pathway out of poverty. (This is proves challenging. Development is a long-term, frustrating, slow, and sweaty business that isn’t very glamorous and doesn’t photograph well.)

(2) We should take strides in allowing for safer, cheaper, easier, and legal international migration.

While we should probably do both, if you’re from the West (and are not a development practitioner or an economist at the IMF) the easiest and simplest way to bear witness to hope is by voting for the opening of our borders. It is simply the most effective, most direct, most dynamic way we (those who have already benefited from international migration) can make a difference in the lives of the poor and vulnerable around the world.

 

Scarcity, Hope, and the Psychology of Poverty

A psychologist walked around a room while teaching stress management to an audience. As she raised a glass of water, everyone expected they’d be asked the “half empty or half full” question. Instead, with a smile on her face, she inquired: “How heavy is this glass of water?”

Answers called out ranged from 8 oz. to 20 oz.

She replied, “The absolute weight doesn’t matter. It depends on how long I hold it. If I hold it for a minute, it’s not a problem. If I hold it for an hour, I’ll have an ache in my arm. If I hold it for a day, my arm will feel numb and paralyzed. In each case, the weight of the glass doesn’t change, but the longer I hold it, the heavier it becomes.”

She continued, “The stresses and worries in life are like that glass of water. Think about them for a while and nothing happens. Think about them a bit longer and they begin to hurt. And if you think about them all day long, you will feel paralyzed – incapable of doing anything.”

Remember to put the glass down.

This is good advice for many people. For many of us, the stresses and worries in life are similar to a glass of water. We can put glass-of-waterthe glass down when we need a break. We can take vacations from work, relax during and ‘evening in’, and forget about whatever is stressing or worrying us for a little while. This sort of behavior is healthy for us to practice and provides us with the rest we need to succeed in life.

For other people, however, ‘putting the glass down’ may not be possible. For some, it may be practically impossible to take a break or a vacation from the stresses and worries in their life. These people are the global poor all over the world. The people who, in local currency equivalents, consume less than $2 per day – that includes every major dimension of consumption: food, housing, education, health, security, transportation, etc.

This is the broad point of Sendhil Mullainathan and Eldar Shafir’s book Scarcity: Why Having So Little Means So Much. Sendhil (a behavioral economist at Harvard) and Eldar (a psychologist at Princeton) demonstrate through lab and field experiments how the mind is taxed by stresses and worries in our life. When humans are busy, or sleep deprived, or poor we focus extra mental “bandwidth” toward whatever is stressing us. This allows us to do amazing things on a deadline or despite a lack of sleep but it takes attention away from other important aspects of life as our minds only have so much bandwidth. The kicker is the busy and the sleep deprived can take a vacation or sleep in on a Saturday morning; the poor however, can’t take a vacation from their poverty. They can’t put the glass down.

This is an important understanding in itself, but there is increasing evidence that there is an added (perhaps secondary) effect of poverty on human cognition.

Although is is not a standard view in economics, many development economists are coming to the understanding that individual desires and economic behavior are often influenced by historical experience and social observation. Rather than existing in isolation, so-called consumer preferences are conditioned by memorable experiences or are formed by comparison with others. In this vein, for many of the poor around the world the environment in which they life (i.e. multi-generational life-stealing poverty) may influence their behavior specifically as it concerns decisions to invest in the future.

In short, the most devastating aspect of global poverty may the critical lack of aspirations, or more broadly hope in the future.

There is a growing literature on the economics of hope (see herehere, here, and here). This literature can be briefly summarized in the conclusion of an important series of lectures given in 2012 by Esther Duflo, an economist at MIT:

A little bit of hope and some reassurance that an individual’s objectives are within reach can act as a powerful incentive. On the contrary, hopelessness, pessimism, and stress put tremendous pressure both on the will to try something, and on the resources available to do so.

I am currently in Myanmar (a place where George Orwell’s grandmother lived and where he himself spent several years working for the Imperial Police). I am here working to implement a field experiment to measure the psychological and economic effects of hope. The study is still in preliminary stages and I’ve spent the last several days in open ended interviews with small-holder farmers and landless villagers in the rural areas of Mon State.

Myanmar is unique and fascinating place to study the formation of hope at the present time. In 2011 democratic elections led to political and economic reforms. While opportunity abounds in many places as prices of important goods and services (i.e. vehicles, electricity, 3G mobile connectivity, health care, ect.) become more affordable due to the opening of the country to global trade, some areas of the country are still constrained and lack access to this opportunity.

I met with a family yesterday that expresses these challenges all too well. The family is Christian in a country and village that is predominately Buddhist. They live on the grounds of their local church for free and, in return, maintain the church property. They own no land and rent no land. Both the mother and father are day laborers and both are currently unable to find work. The mother forages in the forest for bamboo shoots and mushrooms. They have six children, two of which have migrated to Thailand to find work. None of their children have completed formal education and the chances aren’t great for the younger children, according to the father.

When I asked when the last time the family was happy the father responded, “When we are able to have a good meal”. When I asked how often that happened, he responded, “About twice a week”.

I asked what would make their family happy in the future, the father responded, “Last year the church gave each family $100, we’d be happy if that happened again”.

Psychologists say hope is comprised of three elements: goals, agency, and pathways. This family, at least anecdotally, lacks each of these elements. Their aspirations for the future are low and their goals rely heavily on other people.

George Orwell once wrote, “Within certain limits the less money you have the less you worry”. As I sit in the setting of his classics Burmese Days and Shooting an Elephant I have come to realize, he was wrong. The global poor are subject to incredible levels of stress: diseases, expectantly for children, are more likely to be life-threatening; crop failure can lead to starvation. And as shown by the work of Sendhil and Eldar stress makes good decision-making harder.

Perhaps most importantly, the poor lack the institutional environment which fosters good decisions. People, everywhere, underestimate the benefits of education, struggle to save their income, and spend on health care. In rich countries, however, kids going to school is a common social norm; direct deposit and pension systems make personal finance and saving for retirement something many don’t even think about most days; clean and drinkable water comes out of every tap and childhood immunization appointments are automatically set up. Poor countries provide few such prompts and many poor people around the world don’t experience these luxuries.

David Brooks (I know, I know. He’s a polarizing figure) recently wrote: “The world is waiting for a thinker who can describe poverty through the lens of social psychology”. I think the wait is over, the thinkers are here. It’s the folks working on the economics of hope and the psychology of poverty.