Taimaka partners with Berkeley-Stanford research team

This year, we will reach over 7,500 individuals with a life-changing intervention to help families avoid seasonal hunger. But just how life-changing is this? A Berkeley-Stanford team of economists led by Ethan Ligon will help us answer that question.

I. The team

• Ethan Ligon is a Professor of Agricultural and Resource Economics at UC Berkeley. He has conducted studies on vulnerability, risk sharing, agricultural contracts and intra-household allocation in Ecuador, Paraguay, the Phillipines, China, and in several countries across Sub-Saharan Africa.
• Marcel Fafchamps is a Professor (by courtesy) for the Department of Economics at Stanford University. His research interest includes economic development, market institutions and social networks. His current research focuses on entrepreneurship, factor markets, and the efficiency of social networks in Africa and South Asia. Fafchamps also has ongoing research on political economy issues in Africa and Asia.
• Aprajit Mahajan is an Associate Professor of Agricultural and Resource Economics at UC Berkeley. Mahajan’s research interests are in development and econometrics with a regional focus on India. Ongoing research includes field-experiments on management practices in large firms and the provision of health-improving technologies in rural India.
• Jedediah Silver is a PhD student in Agricultural and Resource Economics at UC Berkeley.
• Liz Brown is a Staff Scientist at the Center for Effective Global Action, where she leads research on costing and cost-effectiveness analysis in development.

II. What they’ll do

This year, Ethan and the team will run a small-scale randomized control trial (RCT) of our program. By randomizing the assignment of eligible loan applicants into a treatment group — those families who will get the loan — and a control group — those who will not get the loan — an RCT enables us to isolate the effects of our program on the welfare of some of the poorest families in the world.

III. Cost-effectiveness analysis

As natural skeptics, even of our own work, we are incredibly excited to have the first precise, rigorous estimate of our program’s impact. But the scope of the evaluation does not end there. After all, impact is just half the picture. The other half is cost!

As this graph illustrates, even among interventions which “work,” the most cost-effective interventions outperform the median by an order of magnitude.

In partnership with the Center for Effective Global Action’s Liz Brown, we’ll also rigorously measure our cost of implementation. At the end of this evaluation, around September 2022, we’ll be able to say not only how impactful our program is but how cost-effective it is relative to a cash transfer.

The focus of this research partnership reflects our organizational belief about how policies ought to be made: with a keen focus on cost-effectiveness. We believe deeply in shutting down programs which do not outperform the simple act of giving people cash without conditions.

This principle will animate our next steps — if the program proves to be substantially more cost-effective than a cash transfer, we will scale it up to reach hundreds of thousands of individuals across rural communities in northern Nigeria. If not, we will shut it down without hesitation. In a world where 63% of people live on less than $10 a day and the resources to help them are incredibly scarce, there is no excuse for us to do otherwise.

IV. Gender

There are unique benefits to targeting women, like increased agency, greater investments in children, and reduced risk of intimate partner violence. But, given their aim — to help farmers sell later for a higher price — post-harvest loans are poorly suited for women. This is because women generally do not farm maize, which has the highest seasonal price variation (66% on average in Gombe, where we work).

To address this disconnect, we are piloting an alternative post-harvest loan model. Instead of giving farmers post-harvest cash loans — which are most impactful for (male) maize farmers — we give them in-kind maize loans, which are equally impactful for men and women.

The planned research collaboration will compare maize loans to cash loans as well as and a control group, enabling us to evaluate a pathway to a majority-female loan portfolio, which benefits not only from increased income and decreased food insecurity, but also from increased agency and respect within the household.

VI. Questions?

If you have questions about this research, feel free to write to us!