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Microfinance on the margin: why recent impact studies may understate average treatment effects


  • Bruce Wydick


A series of recent randomised trials estimate the impact of microfinance on incomes, consumption, and other key measures of welfare. This comment demonstrates why impact estimates obtained from experimental designs focusing on marginal microfinance borrowers are likely to understate the impacts yet realised by inframarginal borrowers, those having taken microfinance loans prior to implementation of an experiment, when field experiments are implemented in areas broadly served by microfinance.

Suggested Citation

  • Bruce Wydick, 2016. "Microfinance on the margin: why recent impact studies may understate average treatment effects," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 8(2), pages 257-265, June.
  • Handle: RePEc:taf:jdevef:v:8:y:2016:i:2:p:257-265
    DOI: 10.1080/19439342.2015.1121512

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    Cited by:

    1. Erhardt, Eva Christine, 2017. "Microfinance beyond self-employment: Evidence for firms in Bulgaria," Labour Economics, Elsevier, vol. 47(C), pages 75-95.
    2. Abhijit Banerjee & Esther Duflo & Richard Hornbeck, 2018. "How Much do Existing Borrowers Value Microfinance? Evidence from an Experiment on Bundling Microcredit and Insurance," Economica, London School of Economics and Political Science, vol. 85(340), pages 671-700, October.
    3. R. Khandker, Shahidur & Khalily, M. A. Baqui & A. Samad, Hussain, 2015. "Who Benefits Most from Microfinance in Bangladesh?," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 38(4), pages 1-30, December.

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