12:00—1:30 PM
Center for Global Development, 1800 Massachusetts Avenue, NW, Third Floor, Washington, DC

Social Interactions and Households' Investments and Aspirations: Evidence from Nicaragua

The Center for Global Development and The Paul H. Nitze School of Advanced International Studies presented a Massachusetts Avenue Development Seminar (MADS)* on Thursday, February 28, 2008 on "Social Interactions and Households' Investments and Aspirations: Evidence from Nicaragua" featuring Renos Vakis, Human Development Network, World Bank. Michelle Adato, Senior Research Fellow, IFPRI, served as the discussant.

Download Vakis and Macours presentation (pdf, 145k)

Read Vakis and Macours paper (pdf, 265k)

Paper abstract
: This paper analyzes the role of social interactions in determining households' responses to an asset transfer program. It analyzes whether investments and accumulation patterns are affected by the proximity to female leaders who themselves were also beneficiaries of the transfer program. Using the randomized assignment of three different interventions, we first show that the program changed social interactions and households' perspectives about the future. We then consider the role of female leaders taking advantage of the randomized assignment of leaders to the three interventions within each community. This allows identifying the role of social interactions for the heterogeneity of program outcomes. We find large social spillover effects on human and physical capital accumulation. We explore various mechanisms through which the social dynamics might play a role and investigate the relationship with the change in aspirations. 

*The Massachusetts Avenue Development Seminar (MADS) series is an effort by the Center for Global Development and The Paul H Nitze School of Advanced International Studies to take advantage of the incredible concentration of great international development scholars in the Metro Washington, DC area. The series seeks to bring together members of this community and improve communication between them.

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