Many basic economic theories with perfectly functioning markets do not predict the existence of the vast number of microenterprises readily observed across the world. We put forward a model that illuminates why financial and managerial capital constraints may impede experimentation, and thus...

The investment decisions of small-scale farmers in developing countries are conditioned by their financial environment. Binding credit market constraints and incomplete insurance can reduce investment in activities with high expected profits. We conducted several experiments in northern Ghana in...

We show that the real return to capital in Ghana’s informal sector is high. For farmers, we find annual returns ranging from 205-350% in the new technology of pineapple cultivation, and 30- 50% in well-established food crop cultivation. We also examine the relative prices of durable goods of...

We use newly-available Indian panel data to estimate how the returns to planting-stage investments vary by rainfall realizations. We show that the forecasts significantly affect farmer investment decisions and that these responses account for a substantial fraction of the inter-annual...

We test whether managerial human capital has a first order effect on the performance and growth of small enterprises in emerging markets. In a randomized control trial in Puebla, Mexico, we randomly assigned 150 out of 432 small and medium size enterprises to receive subsidized consulting...

Standard theories of resource allocation within the household posit that parents' investments in their children reflect a combination of children's endowments and parents' preferences for child quality. We study how changes in children's cognitive endowments affect the distribution of parental...

Models of the agricultural household have traditionally relied on assumptions regarding the complementarity or substitutability of family labor inputs. We show how data on time allocations, health shocks and corresponding treatment choices can be used to test these assumptions. Data from...

We estimate the effects of higher quality healthcare usage on health, labor supply and schooling outcomes for sick individuals in Tanzania. Using exogenous variation in the cost of formal sector healthcare to predict treatment choice, we show that using better quality care improves health...

Self-selection into healthcare options biases estimates of the effects of healthcare on health outcomes. We exploit exogenous variation in the cost of formal-sector care to show that the use of such care improves short-term health outcomes for acutely ill children in Tanzania. Better...

Commitment devices offer an opportunity to restrict future choices. However, if severe restrictions deter participation, weaker restrictions may be a more effective means of changing behavior. We test this using a school-based commitment savings device for educational expenses in Uganda. We...