Making an Impact - Economics, Poverty & Policy Making

Photo credits to new.mit.edu

Hello again!

I was casually reading the news and one lead to another before I started watching the press meet of Esther Duflo and Abhijit Banerjee right after the Nobel Prize for Economics was announced. I was struck by what they said - Applying Economics to Alleviate Poverty and in other Developmental Studies has proven to be beneficial! The prize is not only a recognition for the work done by the trio, Esther Duflo, Abhijit Banerjee and Michael Kremer, in this field but is also an impetus a movement like this needs -  it reached me and hopefully will reach many others like you and me!

So to do my bit in spreading the word, let me explain their work briefly. It is possible to find answers to challenges in the social sector by conducting randomized trials and this in turn could help governments create better targeted policies, help sponsors fund more meaningfully and assist NGOs in channelizing their efforts better. These actions could mean we are working more efficiently in resolving issues at hand because a lot of times we do have funds but we don't know how to effectively solve a problem.

To quote an example from the economists' studies - they were studying why vaccination penetration rates are still low in certain parts of India. Every child needs to be vaccinated and in spite of government efforts to ensure this, the citizens are not availing the services. A randomized trial was conducted where the vaccination centers were providing non financial incentives to get immunized and this study showed an improved vaccination rate by almost six times! Take away of this study - With the addition of a bag of lentils which is not a very expensive incentive compared to the costs of running a health center, immunization rates can be improved and also the productivity of running such a health center can be justified.

Should you provide mosquito nets for free or charge for them? How does de-worming kids help? More such questions and answers in this ted talk - https://www.ted.com/talks/esther_duflo_social_experiments_to_fight_poverty?language=en#t-875174

Has this got you thinking? It definitely got my mind running, imagine the impact such projects can create? For someone interested in the social sector and its development, this piece of news definitely caught my interest and I hope to make some productive use of these learnings.

A detailed write up of this example and more such Randomized trails and their results can be found at the J-PAL website which is a one-stop-shop to the Nobel Laureates' and their team's work. I hope you enjoy reading this as much as I did - https://www.povertyactionlab.org/evaluation/improving-immunization-rates-through-regular-camps-and-incentives-india