Measuring Microfinance: Assessing the Conflict between Practitioners and Researchers with Evidence from Nepal
What accounts for the discrepancy between microfinance impact claims of development practitioners and the far smaller impacts found in experimental studies? We demonstrate in a simple theoretical framework why “before-and-after” observations of practitioners overstate microfinance impacts and why estimations in some recent randomized trials understate the average treatment effect on the treated (ATT). Our empirical study uses a unique data set from eastern Nepal to study the impact of microfinance in villages where microfinance did not previously exist. We find that approximately three-fourths of the apparent impact of microfinance observed by practitioners is an illusion driven by correlated unobservable factors.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- White, Halbert, 2006. "Time-series estimation of the effects of natural experiments," Journal of Econometrics, Elsevier, vol. 135(1-2), pages 527-566.
- A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2008.
"Bootstrap-Based Improvements for Inference with Clustered Errors,"
The Review of Economics and Statistics,
MIT Press, vol. 90(3), pages 414-427, August.
- Doug Miller & A. Colin Cameron & Jonah B. Gelbach, 2006. "Bootstrap-Based Improvements for Inference with Clustered Errors," Working Papers 621, University of California, Davis, Department of Economics.
- A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2007. "Bootstrap-Based Improvements for Inference with Clustered Errors," NBER Technical Working Papers 0344, National Bureau of Economic Research, Inc.
- Toshio Kondo & Aniceto Orbeta Jr. & Clarence Dingcong & Christine Infantado, 2008.
"Impact of Microfinance on Rural Households in the Philippines,"
Development Economics Working Papers
22639, East Asian Bureau of Economic Research.
- Orbeta, Aniceto Jr. C. & Dingcong, Clarence G. & Kondo, Toshio & Infantado, Christine, 2008. "Impact of Microfinance on Rural Households in the Philippines," Discussion Papers DP 2008-05, Philippine Institute for Development Studies.
- Imai, Katsushi S. & Gaiha, Raghav & Thapa, Ganesh & Annim, Samuel Kobina, 2012. "Microfinance and Poverty—A Macro Perspective," World Development, Elsevier, vol. 40(8), pages 1675-1689.
- Katsushi S. Imai & Ganesh Thapa & Samuel Kobina Annim, 2010. "Microfinance and Poverty -A Macro Perspective," Discussion Paper Series DP2010-30, Research Institute for Economics & Business Administration, Kobe University.
- Katsushi Imai & Raghav Gaiha & Ganesh Thapa & Samuel Kobina Annim, 2010. "Microfinance and Poverty A Macro Perspective," The School of Economics Discussion Paper Series 1020, Economics, The University of Manchester.
- Katsushi S. Imai & Raghav Gaiha & Ganesh Thapa & Samuel Kobina Annim, 2010. "Microfinance and Poverty -A Macro Perspective," Discussion Paper Series DP2010-33, Research Institute for Economics & Business Administration, Kobe University.
- Shahidur R. Khandker, 2005. "Microfinance and Poverty: Evidence Using Panel Data from Bangladesh," World Bank Economic Review, World Bank Group, vol. 19(2), pages 263-286.
- Khandker, Shahidur R., 2003. "Microfinance and poverty - evidence using panel data from Bangladesh," Policy Research Working Paper Series 2945, The World Bank.
- Gary Chamberlain, 1979. "Analysis of Covariance With Qualitative Data," NBER Working Papers 0325, National Bureau of Economic Research, Inc.
- McIntosh, Craig & Villaran, Gonzalo & Wydick, Bruce, 2011. "Microfinance and Home Improvement: Using Retrospective Panel Data to Measure Program Effects on Fundamental Events," World Development, Elsevier, vol. 39(6), pages 922-937, June.
- Abhijit Banerjee & Esther Duflo & Rachel Glennerster & Cynthia Kinnan, 2015. "The Miracle of Microfinance? Evidence from a Randomized Evaluation," American Economic Journal: Applied Economics, American Economic Association, vol. 7(1), pages 22-53, January.
- Esther Duflo & Abhijit Banerjee & Rachel Glennerster & Cynthia G. Kinnan, 2013. "The Miracle of Microfinance? Evidence from a Randomized Evaluation," NBER Working Papers 18950, National Bureau of Economic Research, Inc.
- Banerjee, Abhijit & Duflo, Esther & Glennerster, Rachel & Kinnan, Cynthia, 2013. "The miracle of microfinance? Evidence from a randomized evaluation," CEPR Discussion Papers 9437, C.E.P.R. Discussion Papers.
- Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
- Becchetti, Leonardo & Castriota, Stefano, 2011. "Does Microfinance Work as a Recovery Tool After Disasters? Evidence from the 2004 Tsunami," World Development, Elsevier, vol. 39(6), pages 898-912, June.
- Guush Berhane & Cornelis Gardebroek, 2010. "Does Microfinance Reduce Rural Poverty? Evidence Based on Household Panel Data from Northern Ethiopia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(1), pages 43-55.
- Berhane, Guush & Gardebroek, Cornelis, 2009. "Does microfinance reduce rural poverty? Evidence based on household panel data from northern Ethiopia," 2009 Conference, August 16-22, 2009, Beijing, China 51472, International Association of Agricultural Economists.
- Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 249-275.
- Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2002. "How Much Should We Trust Differences-in-Differences Estimates?," NBER Working Papers 8841, National Bureau of Economic Research, Inc.
- Coleman, Brett E., 1999. "The impact of group lending in Northeast Thailand," Journal of Development Economics, Elsevier, vol. 60(1), pages 105-141, October.
- David Roodman & Jonathan Morduch, 2014. "The Impact of Microcredit on the Poor in Bangladesh: Revisiting the Evidence," Journal of Development Studies, Taylor & Francis Journals, vol. 50(4), pages 583-604, April.
- David Roodman & Jonathan Morduch, 2009. "The Impact of Microcredit on the Poor in Bangladesh: Revisiting the Evidence," Working Papers 174, Center for Global Development.
- Erica Field & Rohini Pande & John Papp & Natalia Rigol, 2013. "Does the Classic Microfinance Model Discourage Entrepreneurship among the Poor? Experimental Evidence from India," American Economic Review, American Economic Association, vol. 103(6), pages 2196-2226, October.
- Mark M. Pitt & Shahidur R. Khandker, 1998. "The Impact of Group-Based Credit Programs on Poor Households in Bangladesh: Does the Gender of Participants Matter?," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 958-996, October. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:68:y:2015:i:c:p:30-47. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.