Work in Progress

Impact of Health Insurance in Rural Kenya (RCT)
Co-authors: Jack Willis (Columbia University, Assistant Prof.) and Lorenzo Casaburi (University of Zurich, Associate Prof.)

Stage: Funding secured, IRB approval obtained, pilots conducted

In this study, we investigate the impact of a novel mobile money microinsurance product. The product covers hospital insurance as well as life insurance. The local insurance company offers the product to community groups, harvesting information that the group members have about each other. This allows the company to reduce information asymmetries and consequently the price of insurance. In our study, treatment groups obtain the microinsurance product and control groups receive an equivalent cash amount.

Peer Effects and Bank Choice
Co-authors: Naz Koont (Columbia University, PhD Candidate)

Stage: Data analysis

In this paper, we are interested in how peer effects affect bank choice. For example, a customer might decide to use Bank of America because it got recommended by her friends. In order to test whether peer effects play a role in bank choice, we combine the social connectedness index with branch-level data to measure how exposed your peers are to a certain bank. This novel measure of peer exposure is time-varying and bank-county specific, allowing us to control for many unobservables and identifying the causal effect of peer effects on bank choice.

Necessity Entrepreneurs: Evidence from Kenyan High-Frequency Data

Co-authors: Rebecca DeSimone (London Business School, Assistant Prof.)

Stage: Data analysis

In this paper, we utilize high-frequency financial diaries data from Kenya to demonstrate that households are significantly more likely to engage in self-employment activities on the internal and external margin after a hospitalization of a household member or neighbor. We investigate two explanations: First, households might utilize self-employment as a coping mechanism to cover expenses. Second, households might take advantage of the informal transfers from their social networks during times of need to accumulate a lump sum to start their business.

Tax Withholding and Firm Outcomes
Co-authors: Rebecca DeSimone (London Business School, Assistant Prof.) and Néstor Rondal (Ecuadorian Tax Authority)

Stage: Data obtained, identification strategy developed

In this paper, we use a policy of the Ecuadorian Tax Authority to study the impact of tax withholding on firm outcomes. The policy induced certain firms to withhold taxes of their smaller suppliers. In absence of financial frictions, this shift in timing when suppliers have to pay taxes should not matter much for firm outcomes. However, in a world with frictions, small suppliers that face early tax payments might have to forego investment opportunities or lack capital to buffer adverse events, resulting overall in lower firm growth. How to foster growth of small firms is an important question for policymakers in developing countries.