Targeting, beliefs in own potential and subsequent investments: Theory and evidence from a framed field experiment
Elisa van Dongen et al.
What the paper says
While increased pressure on development finance budgets may require to reduce spending on anti-poverty transfers, new technical possibilities allow for more precise targeting. Yet, how targeting affects development outcomes remains an open question. We introduce a behavioral mechanism: if transfers are targeted to low-income individuals, recipients may interpret this as a signal of lacking earning potential, and consequently reduce investments. Using a framed field experiment in rural Uganda, we study how the targeting of anti-poverty transfers – compared to universal provision – affects subsequent investment behavior. Consistent with our hypotheses, we find that targeted recipients reduce their investments, which may reduce their earnings.
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.50 × 0.4 = 0.20 |
| M · momentum | 0.50 × 0.15 = 0.07 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.