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Impact of Community Information in Identifying High Ability Microentrepreneurs
secondary evaluation summary · J-PAL
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Cost-Effective Field Information Acquisition
"Researchers suggest that if lenders were to collect community information and provide incentives to respondents, the cost of lending would increase by INR 40 (US$ 0.7) per loan, an amount far less than the estimated gains for high-potential microentrepreneurs."
Capital Deployment and Factor Allocation
"High-potential entrepreneurs also spent more time working: they worked an additional 9.9 hours per week and an extra 4.6 days per month."
Heterogeneous Capital Returns in Microenterprises
"The increases in income and profits indicate that households on average had a return between 10-11 percent per month from the cash grant. Conversely, entrepreneurs ranked by their peers in the top third of the community had returns between 24-30 percent per month, around 3 times greater than the average entrepreneurs."
Hybrid Targeting Model
"While entrepreneurs falling in the top third of the community based on observable characteristics alone had returns of 13.6 percent per month, entrepreneurs in the top third based on observables as well as community information had returns of 38 percent."
Local Social Network Information Density
"Two-thirds of respondents identified one other group member as a family member or close friend, and over half reported that they regularly discussed private family and business matters with at least one other group member."
Peer-Based Selection of Microentrepreneurs
"Conversely, entrepreneurs ranked by their peers in the top third of the community had returns between 24-30 percent per month, around 3 times greater than the average entrepreneurs."
Social Transparency in Peer Reporting
"When community members ranked their peers under 'no stakes' conditions, both offering small monetary payments to reward accurate responses and public reporting of rankings doubled the accuracy of reporting. However, under the 'high-stakes' condition, giving community members the opportunity to view other's ranking in public, rather than in private, had limited effects."
Strategic Misreporting in High-Stakes Peer Evaluation
"The accuracy of responses dropped on average by 30 to 34 percent when the allocation of resources was at stake."
Truthfulness Compensation in Mechanism Design
"Conversely, the monetary payments substantially improved the accuracy of reports by over 100 percent."