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Aspiring to a better future: can a simple psychological intervention reduce poverty?

Author

Listed:
  • Stefan Dercon
  • Kate Orkin
  • Mahreen Mahmud
  • Robert Garlick
  • Johannes Haushofer
  • Richard Sedlmayr

Abstract

How do aspirations influence investment decisions for people living in poverty? Does this change as peoples economic conditions improve? To answer these questions, we design a work¬shop teaching techniques to raise aspirations and plan to achieve them. We cross-randomise this with large unconditional cash transfers in a 415-village, 8,300-person, 1.5-year experiment in Kenya. The workshop substantially raises aspirations, investment, and living standards. But the workshop+cash produces similar effects to cash alone, potentially because cash raises aspirations. Thus, helping people living in poverty set higher aspirations can raise investment and living standards, but improving economic conditions can activate the same process.

Suggested Citation

  • Stefan Dercon & Kate Orkin & Mahreen Mahmud & Robert Garlick & Johannes Haushofer & Richard Sedlmayr, 2023. "Aspiring to a better future: can a simple psychological intervention reduce poverty?," CSAE Working Paper Series 2023-12, Centre for the Study of African Economies, University of Oxford.
    • Handle: RePEc:csa:wpaper:2023-12
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    References listed on IDEAS

    as
    1. Anderson, Michael L., 2008. "Multiple Inference and Gender Differences in the Effects of Early Intervention: A Reevaluation of the Abecedarian, Perry Preschool, and Early Training Projects," Journal of the American Statistical Association, American Statistical Association, vol. 103(484), pages 1481-1495.
    2. repec:wbk:wbpubs:15194 is not listed on IDEAS
    3. repec:wbk:wbpubs:15195 is not listed on IDEAS
    4. Nava Ashraf & Dean Karlan & Wesley Yin, 2006. "Tying Odysseus to the Mast: Evidence From a Commitment Savings Product in the Philippines," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(2), pages 635-672.
    5. Owen Ozier, 2018. "The Impact of Secondary Schooling in Kenya: A Regression Discontinuity Analysis," Journal of Human Resources, University of Wisconsin Press, vol. 53(1), pages 157-188.
    6. McKenzie, David & Gibson, John & Stillman, Steven, 2013. "A land of milk and honey with streets paved with gold: Do emigrants have over-optimistic expectations about incomes abroad?," Journal of Development Economics, Elsevier, vol. 102(C), pages 116-127.
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    Cited by:

    1. Witte, Marc J. & Roth, Johanna & Hardy, Morgan & Meyer, Christian Johannes, 2025. "Reaching Marginalized Job Seekers Through Public Employment Services: Experimental Evidence from Ethiopia," IZA Discussion Papers 18005, IZA Network @ LISER.
    2. Joshi, Mukta & Teh, Wen Wen & Vargas, Ariadna & Dadzie, Christabel E. & Datta, Saugato, 2025. "Do Behavioral Interventions Help Economic Inclusion Program Recipients Make More Productive Use of their Payments? Evidence from a Cluster-Randomized Trial in Ghana," The Social Policy and Labor Discussion Paper Series 207029, The World Bank.
    3. Cai, Guowei & Yao, Tao & Wang, Xun, 2025. "Market accessibility and poverty alleviation: Evidence from China," Journal of Asian Economics, Elsevier, vol. 100(C).

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    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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