Kinship networks are beneficial for smoothing consumption and investment, but the channels are not well understood. We study the financing devices used for consumption and investment by Thai ...households. Households that are connected to banks achieve significantly better consumption smoothing than unconnected households; indirect connections via inter-household borrowing are as effective as direct borrowing. Investment appears to be facilitated by kinship: households with kin in the village display reduced sensitivity of investment to income, while connections to banks do not significantly reduce sensitivity. Kin may act as "implicit collateral," permitting borrowing that would violate repayment constraints in its absence. PUBLICATION ABSTRACT
We propose a model with local spatial markets and heterogeneous agents to understand and evaluate the geographic expansion of bank branches after banking deregulation in Thailand. The model features ...heterogeneity in financial frictions across regions, with the costs of accessing credit and deposits depending on the distance from the nearest branch. Disciplined by micro estimates of the effects of branch openings, the model reproduces salient regional and aggregate patterns concerning occupational choice, financial access, and inequality. We apply the model to study two counterfactual financial sector policies in distant markets, one subsidizing branches and the other subsidizing household deposits.
Why do many households remain exposed to large exogenous sources of nonsystematic income risk? We use a series of randomized field experiments in rural India to test the importance of price and ...nonprice factors in the adoption of an innovative rainfall insurance product. Demand is significantly price sensitive, but widespread take-up would not be achieved even if the product offered a payout ratio comparable to US insurance contracts. We present evidence suggesting that lack of trust, liquidity constraints, and limited salience are significant nonprice frictions that constrain demand.We suggest possible contract design improvements to mitigate these frictions.
An economic analysis of what distributed ledgers can do, examining key components and discussing applications in both developed and emerging market economies. Distributed ledger technology (DLT) has ...the potential to transform economic organization and financial structures. In this book, Robert Townsend steps back from the hype and controversy surrounding DLT (and the related, but not synonymous, innovations of blockchain and Bitcoin) to offer an economic analysis of what distributed ledgers can do and a blueprint for the optimal design and regulation of financial systems. Townsend examines the key components of distributed ledgers, discussing, evaluating, and illustrating each in the context of historical and contemporary economies, reviewing featured applications in both developed economies and emerging-market countries, and indicating where future innovations can have large impact. Throughout, Townsend emphasizes the general equilibrium impact of DLT innovations, the welfare gains from these innovations, and related regulatory innovations. He analyzes four crucial components of distributed ledgers—ledgers as accounts, e-messages and e-value transfers, cryptography, and contracts—assessing each in terms of both economics and computer science, and forges some middle ground. Relatedly, Townsend highlights hybrid systems in which some of these components allow useful innovation while legacy or alternative pieces deal with the problem of scale. The specific applications he analyzes include an intelligent financial automated system that provides financial services to unbanked and under-banked populations, and cross-border payments systems, including financial systems that can integrate credit and insurance with clearing and settlement. Finally, Townsend considers cryptocurrencies, discussing the role and value of tokens in economies with distributed ledger systems.
I have spent close to 20 years cataloging transactions between households in Thai villages, along with a research team. Just this past summer, we documented a number of ways in which even relatively ...poor villages have money markets not dissimilar in some ways from New York financial markets, with borrowing and repayment passing along links in credit chains. In another project, we have been looking at month-by-month school attendance, grade level completion, and graduation for children in these villages, following them from birth to graduation. The Townsend Thai project is a theory-based data collection endeavor, measuring and mapping village and larger economies into general equilibrium frameworks. This paper reviews a number of findings, implications, applications, and lessons learned, and considers next steps.
Take-up of an innovative rainfall insurance policy offered to smallholder farmers in rural India decreases with basis risk between insurance payouts and income fluctuations, increases with household ...wealth, and decreases with binding credit constraints. These results are consistent with the predictions of a simple neoclassical model with borrowing constraints. Other patterns are less consistent with the benchmark model. For example, participation in village networks and measures of familiarity with the insurance vendor are strongly correlated with insurance take-up decisions, and risk-averse households are less, not more, likely to purchase insurance. These results may reflect household uncertainty about the product, given their limited experience with it.
This paper uses a structural model to understand, predict, and evaluate the impact of an exogenous microcredit intervention program, the Thai Million Baht Village Fund program. We model household ...decisions in the face of borrowing constraints, income uncertainty, and high-yield indivisible investment opportunities. After estimation of parameters using preprogram data, we evaluate the model's ability to predict and interpret the impact of the village fund intervention. Simulations from the model mirror the data in yielding a greater increase in consumption than credit, which is interpreted as evidence of credit constraints. A cost-benefit analysis using the model indicates that some households value the program much more than its per household cost, but overall the program costs 30 percent more than the sum of these benefits.
•Develop a general equilibrium model featuring multiple realistic sources of financial frictions to study how different financial constraints interact in equilibrium. The model can be used to ...separately quantify the extent to which relaxing different constraints can drive economic growth and the dynamics of income inequality.•The economic impact of financial inclusion policies in an economy depends not only on which constraint is alleviated but also on the tightness of other constraints.•Though financial inclusion policies may target the most binding constraint, this can vary across countries in ways that may not be obvious, apriori.•There are important tradeoffs between financial inclusion, GDP, and the distribution of income when conducting financial inclusion policies.•There are also inter temporal tradeoffs and policy commitment issues, as some variables move in the short term in the opposite direction from their longer run impact.
A general equilibrium model featuring multiple realistic sources of financial frictions is developed to study how different constraints interact in equilibrium. We highlight, distinguish, and evaluate their differential impacts and rich interactions. The economic impact of financial inclusion policies in an economy depends not only on which constraint is alleviated, but also on the tightness of other constraints. Policy instruments should target the most binding constraint, which likely varies across countries. Moreover, there are important tradeoffs between financial inclusion, GDP, and the distribution of income. The transitional dynamics also differ from those in steady states. Policy makers should consider both.
The purpose of this review was to address the central theme of technology-enhanced learning (TEL) in coaching. "Technology-enhanced learning" (TEL), has become a widely-accepted term for describing ...the interface between digital technology and teaching. The aim was to consider the evidence of TEL in coach education, and where appropriate the wider educational field. The review sought to contribute to an evidence base of suggestions that can be promoted and developed inside and outside of coach development structures and interventions for TEL. In addition, the review sought to outline future areas for research, and to stimulate debate about the implementation and effectiveness of technology-enhanced coach learning. The review utilised a critical methodology, using principles of systematic review to gather evidence pertaining to TEL in coaching. From this number, and considering the inclusion criteria, 64 articles were included and reviewed in detail. The review revealed how despite the use of technology in coaching, teaching and learning the evidence of their efficacy is weak, and the use of TEL in coaching requires further longitudinal research that considers learner, pedagogy and pedagogic design in context, in order to understand its potential impact on optimising coach development pedagogies, and therefore, contributing to a discourse of effective coach learning.
This paper analyzes Thailand's 2001 healthcare reform, "30 Baht." The program increased funding available to hospitals to care for the poor and reduced copays to 30 Baht (~$0.75). Our estimates ...suggest the supply-side funding of the program increased healthcare utilization, especially among the poor. Moreover, we find significant impacts on infant mortality. Prior to 30 Baht, poorer provinces had significantly higher infant mortality rates than richer provinces. After 30 Baht, this correlation evaporates to zero. The results suggest that increased access to healthcare among the poor can significantly reduce their infant mortality rates.
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