Polania Reyes, SV; (2015) Essays on experimental economics in the field: lessons for public policy. Doctoral thesis , UCL (University College London).

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Abstract

Traditional economic theory has found in experimental economics a source of both support and challenge. Similarly, policy makers have found the need to understand the behavioral underpinnings of their target populations. To achieve efficiency policies need to exploit difficult concepts such as social capital, social preferences and crowding effects. Despite its importance for development and poverty alleviation, social capital remains elusive as its parts, social norms and beliefs about others, willingness to cooperate and individual connections, move together. We disentangle social capital using an artefactual field experiment, to our knowledge the first of its kind to use a minimum effort coordination game to measure coordination. Together with network information, cooperation from a Public Goods game and traditional survey measures of social capital, we report a positive relation between a CCT program and the ability to coordinate in the most efficient outcome. Social preferences help explain deviations from Nash equilibrium in game outcomes. An enduring challenge is to identify types in the presence of heterogeneity. Using data from a common pool resource (CPR) game in the field with 1,095 individuals (students and CPR users) we estimate a structural model including preferences for altruism, reciprocity and equity. Our type identification uses a latent class logit model based on exogenous determinants. A competing explanation is the existence of a cognitive factor (e.g. Quantal Response Equilibrium). We do not find much evidence for cognitive heterogeneity, and instead a great deal of behavioral heterogeneity. Types seem robust out-of-sample. Workfare programs might crowd out private labor effort. We analyze the impact of a Colombian workfare program called Job in Action to shed light on: (1) labor crowding-out, (2) gains in household labor income and (3) persistence in gains after the program has finished. We see no evidence of effort crowding out. We find large positive transfer benefits and a positive effect on individuals’ outcomes even six months after the program ended.

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