Abstract
This chapter explains the experimental design of the randomized controlled trials we conducted in northern Bangladesh to examine the impact of seasonality-adjusted flexible microcredit, targeting the ultra-poor. In addition to describing our experimental design, this chapter compares the means of the characteristics of sample villages and households across various treatment arms. It reveals that most observable characteristics prior to our intervention were very similar across treatment arms, indicating that randomization was properly implemented. Descriptive analysis of the baseline survey data also indicates that our sample households belong to the poorest section of the rural Bangladesh.
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Notes
- 1.
It is debatable whether this occurs only in terms of moral support or also implies joint liability in a legally enforceable sense; nonetheless, this debate is irrelevant to our context.
- 2.
See Kurosaki and Khan (2012) for an exceptional case in which an MFI suffered from high default rates despite adopting a Grameen-type credit scheme. In this case, weak enforcement of the contingent renewal rule led strategic default to prevail among borrowers.
- 3.
BDT 100 is equivalent to approximately JPY 99 or USD 1.22. BDT 3,000 therefore equals approximately USD 37.
- 4.
For convenience, Table 5.2 and all following tables show the estimate for the intercept in the first row, which is readily interpreted as the estimate for the overall mean if all coefficients on the three (four) dummy variables are zero.
- 5.
The “bus stand” here refers to the availability of any bus stand in the village, while the “bus station” used in our randomization strata refers to the distance from the closest bus station at which medium- and long-distance bus services are available.
- 6.
A difference might occur at the household level across treatment arms, as treatments were randomized at the village level. For example, Czura et al. (2011) state that “Differences in client characteristics are due to the fact that randomization occurred at the group level and groups form according to socioeconomic characteristics” (10).
- 7.
To be more precise, owing to data entry problems, we used Panel 3 data for the household demography variables (age was adjusted by 1 year), supplemented by Panel 1 data for the 22 attrition households. For land and assets, we used Panel 1 data.
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Kurosaki, T. (2014). Experimental Design for Flexible Microcredit Trials. In: Shonchoy, A. (eds) Seasonality and Microcredit. SpringerBriefs in Economics. Springer, Tokyo. https://doi.org/10.1007/978-4-431-55010-5_5
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DOI: https://doi.org/10.1007/978-4-431-55010-5_5
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