This dissertation consists of three self-contained chapters in economics.
In the first chapter, I study behavioral explanations for credit products usage and asset accumulation by studyingthe demand for, and welfare impacts of, costly self-control. I offer Malawian micro-entrepreneurs solar lamps for purchase, for which payment can be completed either in weekly installments or as a single deferred lump sum payment. An incentive-compatible willingness-to-pay experiment reveals that individuals are willing to pay a premium of nearly 22 percent of the price of the solar device to pay for it in weekly installments. Lack of access to secure savings technologies, and demand for self control rules can both drive demand for the installments plan. To identify the relative importance of each of these factors, I induce experimental variation in access to a secure savings technology. Despite a 15 percent reduction in the premium among those given the savings technology, it remains large and significant indicating that there are barriers to saving beyond access to basic savings products. Paying in installments increases the probability of timely completion of payment by 13 percentage points, but defaulters are hurt more by the installments plan than the lump sum plan.
The second chapter is co-authored work with Shilpa Aggarwal and Jonathan Robinson. Many farmers in the developing world lack access to effective savings and storage devices. Such devices might be particularly valuable for farmers since income is received as a lump sum at harvest but expenditures are incurred throughout the year, and because grain prices are low at harvest but rise over the year. We experimentally provided two saving schemes to 132 ROSCAs in Kenya, one designed around communally storing maize and the other around saving cash for inputs. About 56% of respondents took up the products. Respondents in the maize storage intervention were 23 percentage points more likely to store maize (on a base of 69%), 37 percentage points more likely to sell maize (on a base of 36%) and (conditional on selling) sold later and at higher prices. We find no effects of the individual input savings intervention on input usage, likely because baseline input adoption was higher than expected.
The final chapter is co-authored with Joshua Blumenstock and Jonathan Robinson. In the past few years, digital credit has emerged as an alternative mechanism for providing short-term loans. In this chapter, we summarize the current state of digital credit, focusing primarily on the currently dominant form of credit ? consumer loans offered through mobile money systems, often backed by a financial institution. We summarize the current landscape, and we discuss various ways in which digital credit will represent a change from previously available forms of credit, in particular microcredit or bank loans. We conclude with some possible directions for further research.
