Single-Industry Sectoral Standardisation in Enterprise RCTs

In Simple Words

Imagine testing a new training program on a group consisting of a farmer, a computer repairman, and a baker. Because their daily operations are completely different, a trainer must give vague, general advice that barely fits anyone. By contrast, if a trainer works only with bakers, they can master baking equipment, recipes, and ingredient costs, offering deep, tailored feedback that accurately tests whether better advice improves bakery operations.

Research question

Enterprise development studies often sample heterogeneous firms across multiple industries, introducing substantial unobserved variance in production functions and masking sector-specific constraint dynamics.

Participants

160 microenterprise tailors across 8 neighborhoods in Accra, Ghana, where 35% operated with zero employees and 94% had three or fewer.

Study Design

Single-industry randomized trial design selecting tailors within a defined geographic boundary to enable deep consultant specialization and eliminate cross-industry variance.

Results

Concentrating on a single trade allowed four business consultants to deliver 1,200 hours of sector-specific coaching (averaging 10 hours per tailor), eliminating cross-sector noise and permitting precise tracking of 35 tailoring-specific operational practices over eight survey rounds.

Takeaway

Restrict enterprise evaluation samples to single defined industries when evaluating specialized managerial capital interventions to maximize measurement precision.

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