pathways less explored (aerc 2015)

02/05/2023 1

Pathways Less Explored – Aspirations, Locus of Control, and Agricultural Transformation

Alemayehu Seyoum Taffesse (IFPRI),Fanaye Tadesse (IFPRI)

African Economic Research Consortium (AERC) Plenary Session on

“Agriculture and Structural Transformation in Africa”November 29 – December 3, 2015

Addis Ababa, Ethiopia

Motivation State of African Agriculture (no statistics) Pathways less explored – psychological and social

influence that can complement, accelerate Conceptual issues

Two concepts – Aspirations, Locus of control A schema

Applications to Ethiopia LOC and adoption of modern farm inputs; Summary of work on aspirations

Observations – so what?

Outline

02/05/2023 2

Motivation – State of Agriculture

02/05/2023 3

Summary – Outcome state low and slow-growing productivity,

Summary – Conditioning states limited capital stock (physical, human, infrastructural, natural), weak institutions (imperfect markets, property rights, civil

service including agencies of public service delivery, early-warning and emergency assistance systems);

exposure to shocks (natural, market, political); Policy Instruments

public investment (research and extension services, education, health, infrastructure);

reforms – effective policy making process, land reform, public sector reform, incentives (taxes and subsidies, interest rates, regulation);

Question: Are there complementary pathways not yet used?

Motivation – why do poor people underinvest?

02/05/2023 4

Underinvestment by the poor – a source of persistence in low productivity, poverty, and inequality

Focus 1 - ‘external circumstances’ and ‘opportunities’. Low returns to investments; Unexploited opportunities due to lack of information or knowledge; Social constraints;

Conceptual – ‘opportunities’ Focus 2 - constraints associated with the manifested

attributes of decision makers Identity issues: sense of self; Psychological issues: impatience, commitment, and

psychological barriers Aspirations failure

Conceptual Issues – Two Concepts

02/05/2023 5

Aspirations (Lewin, Simon, Appadurai, Ray, Bernard et al): are goals or preferred boundary-states with respect to a

relevant domain of choice (future-oriented); differ from expectations – preferences vs. beliefs; important for analysing and/or addressing behaviour –

motivators, heterogeneous, context-dependent and changing;

Locus of Control (Bandura, Rotter, Levenson, Hill): a person’s belief regarding the primary causation of events

in his or her life in general or in a specific area; ‘internal’ vs. ‘external’; deemed a powerful influence on personality and behaviour; used to predict behaviour in a lot of spheres (health,

education, employment …)

02/05/2023 6

Conceptual Issues – A Schema

Preferences - Aspirations

Aspirations gap

Preferences - Others

Experience (personal, collective; including shocks)

Figure 1: Conceptual Schema

Beliefs (locus of control, self-

efficacy, expectations. ...)

Behaviour or actions

Environment (economic,

cultural, natural, institutional, …)

02/05/2023 7

Premise – Poorer households use less modern inputs

Low productivity and poverty persist;

.3.4

.5.6

.7

1 2 3 4 55 quantiles of wealth_index

95% CI predicted fert_use

.1.1

5.2

.25

.3.3

5


95% CI predicted improved_seed

36% - Fertilizers121% - Improved

SeedsChemical fertilizers and improved seeds = 20% of crop yield growth during 2005-2013 in Ethiopia (Bachewe et al. (2015))

02/05/2023 8

Premise – LOC a possible pathwayMeasuring LOC: Binary

Survey LOC-

Destiny (%)

Number of Observation

s

Ethiopia - PSNP 2008 25.8 4,360Ethiopia - ERHS 2009 30.9 2,068Ethiopia - PSNP 2010 32.3 4,619

Ethiopia - Aspirations Survey 2010-11 37.7 2,068Ethiopia – AGP Baseline Survey 2011 35.3 7,896

IFPRI Pakistan Household Survey 2011 58.1 1546Malawi Rural Household Survey-2011 27.0 671Ethiopia - FTF Baseline Survey 2013 30.3 6903

Ethiopia – Transport Survey 2014 31.4 775

“Each person is primarily responsible for his/her success or failure in life.” “A person’s success or failure in life is a matter of his/her destiny.”

02/05/2023 9

Premise – LOC a possible pathway

Locus of control – pared down version of Levenson (1981)C To a great extent my life is controlled by accidental/chance happenings.O I feel like what happens in my life is mostly determined by powerful people.I When I make plans, I am almost certain/guaranteed/sure to make them work.C Often there is no chance of protecting my personal interests from bad luck

happenings.C When I get what I want, it’s usually/mostly because I’m lucky.C My experience in my life has been that what is going to happen will happen.O My life is chiefly controlled by other powerful people. O People like myself have very little chance of protecting our personal interests

when they conflict with those of more powerful people.C It’s not always wise for me to plan too far ahead because many things turn out to

be a matter of good or bad fortune.O Getting what I want requires making those people above me (people with higher

status) happy with me.I I can mostly determine what will happen in my life.I I am usually able to protect my personal interests (I can usually look after what is

important to me)I When I get what I want, it’s usually because I worked hard for it.O In order to have my plans work, I make sure that they fit in with the desires of

people who have power over me.I My life is determined by my own actions.

Measuring LOC: Four-level (Likert-type) semantic scale (Strongly disagree, Disagree, Agree, Strongly agree)

02/05/2023 10

Results – LOC and Wealth

77.

58

8.5

9


95% CI predicted LOC_others

11.5

1212

.513

13.5

14


95% CI predicted LOC_internal

8.2

8.4

8.6

8.8

99.

2


95% CI predicted LOC_chance

Poorer individuals have lower (higher) internal (external) locus of control (7-17%);

Also holds for the AGP and Transport Surveys;

77.

58

8.5

9


95% CI predicted LOC_others

11.5

1212

.513

13.5

14


95% CI predicted LOC_internal

02/05/2023 11

Results – LOC and Wealth

LOC-Internal

LOC-Chance

LOC-Others

Gender (Male=1) 0.353*** -0.324*** -0.424***

(0.128) (0.125) (0.133)

Age (Years)0.007 0.004 -0.012

(0.020) (0.021) (0.021)

Schooling (Years)0.068*** -0.004 -0.03

(0.024) (0.024) (0.023)

Wealth Quintile0.183*** -0.136*** -

0.185*** (0.065) (0.041) (0.043)

Constant12.246*** 8.956*** 8.757***

(0.480) (0.512) (0.532)Number of Observations 5925 5925 5925

The LOC-Wealth relations hold after controlling for age, gender, and schooling of the respondent

02/05/2023 12

Results – LOC and AspirationsItem Overall

AspirationGender (Female=1) -0.159

(0.000)***Age (years) 0.003

(0.088)*Age Squared (years) -0.00

(0.020)**Highest grade of schooling completed 0.132

(0.000)***Wealth 0.013

(0.608)Locus of control - Chance 0.034

(0.152)Locus of control - Powerful Others -0.004

(0.907)Locus of control - Internal 0.106

(0.000)***Constant -0.486

(0.001)***N 1631Villages 63F( 8, 55) = 32.20 0

02/05/2023 13

Hypothesis – LOC and Poverty

Poorer individuals have lower internal (higher external) locus of control;

A feedback loop linking LOC and poverty? Poverty lowers internal LOC, but is not a complete

determinant; Weak internal (or strong external) LOC discourages

‘investment’ by the poor; Poverty persists …

Explore the hypothesis in relation to adoption of modern inputs by farmers in rural Ethiopia

Three surveys – AGP (2011), FTF (2013), Transport (2014)

02/05/2023 14

Specification – Modern Input UseSpecification - Probit (Multivariate Probit) regression of fertilizer use, improved seed use:Controls: Respondent’s sex, age, schooling, LOC scores; Household wealth; Number of working-age male members in the household, Household landholding (hectares), Soil fertility, Slope of plot, Access to extension services (yes=1), Land certification, Average distance of parcels from the homestead (minutes), Distance to a permanent market (km), Fraction of landholding cultivated with cereals, Off-farm and/or non-farm income (yes=1), Access to credit (yes=1), rainfall (mm in logs)

02/05/2023 15

Results – LOC and Modern Input Use Marginal Effects

(FTF Survey (2013)) Fertilizer

useImproved

seed

Locus of Control - Chance -0.012*** 0.000(0.003) (0.002)

Locus of Control - Internal 0.003 0.003(0.003) (0.002)

Gender of Household Head (Male=1) -0.014 -0.032*(0.019) (0.016)

Age of Household Head (Years) -0.001 -0.003(0.003) (0.002)

Schooling of Household Head (Years) 0.009** -0.001(0.003) (0.003)

Wealth Quintile 0.043*** 0.035***(0.009) (0.007)

Number of Observations 5639 5639Wald test 311.04 124.89P-values 0.000 0.000

02/05/2023 16

Results – LOC and Modern Input Use Marginal Effects

(AGP Survey (2011)) Fertilizer

useImproved

seed

Locus of Control - Chance -0.001 0.000(0.003) (0.002)

Locus of Control - Internal 0.002 0.001(0.003) (0.002)

Gender of Household Head (Male=1) 0.075*** 0.039***(0.017) (0.012)

Age of Household Head (Years) 0.010*** 0.005**(0.002) (0.002)

Schooling of Household Head (Years) 0.012*** 0.006**(0.004) (0.002)

Wealth Quintile 0.011 -0.003(0.007) (0.005)


02/05/2023 17

Results – LOC and Modern Input Use

Marginal Effects(Transport Survey

(2014) Fertilizer

useImproved

seed

Locus of Control - Chance -0.002 -0.002(0.003) (0.004)

Locus of Control - Internal 0.007** 0.012*(0.003) (0.006)

Gender of Household Head (Male=1) 0.230** 0.083*(0.093) (0.049)

Age of Household Head (Years) 0.002 0.009(0.005) (0.010)

Schooling of Household Head (Years) -0.008 -0.019(0.010) (0.018)

Wealth Quintile 0.028*** 0.042***(0.006) (0.016)


02/05/2023 18

Summary Internal locus of control correlates with higher

likelihood of adopting modern inputs (chemical fertilizers and improved seeds), while chance locus of control is linked with lower likelihood.

The size of the correlation is comparable to that with schooling.

Heterogeneity of circumstances matter for the association; remoteness (Road Survey), access to extension services (AGP Survey), …

Summary – Bernard et al. (2015b) Results (based on ERHS, Insurance panels)

Poorer individuals have on average lower aspirations; Results persist across specifications; Panel data used, but happy to consider them as

correlations; Issues

Measurement – revealed vs. declared – develop an instrument

Identification – correlations vs. causal links (poverty–low aspirations) – field experiment

02/05/2023 19

Do people’s aspirations affect whether they invest? Randomly assign Ethiopian farmers to watch videos about the

lives of four role models. Treatment = one hour of documentaries. No other intervention. Very good balance at baseline across groups.

Key findings: Improvements in aspirations after screening and after six

months. Changes in related psychosocial characteristics (LoC), but not

risk aversion or time preferences. Small improvements in savings, credit, demand for credit,

children’s school enrolment and spending on schooling 6 months after screening.

Repeat survey coming up, production-side data to be collected.

,

Summary – Bernard et al. (2015a)

02/05/2023 20

02/05/2023 21

ObservationsSo what? Any policy implications? [WDR (2015)]

Ascertain the nature and extent of “psychological and social influences” that affect behaviour – “desirable, possible, ‘thinkable’”;

Relevance to policy design (complementary to incentives): Focus both on ‘what’ and ‘how” – timing, labelling,

simplifying, reminding; Understand target communities – norms, identity;

Examples form the suggestive evidence above: Poor vs. non-poor – same delivery modality may not work; Male vs. female – additional reason to enhance women

empowerment in agriculture;Motivational devices, Role modelsA lot to be learnt – more research and experimentation

02/05/2023 22

Thank you

pathways less explored (aerc 2015)

Economy & Finance