Time: 2:00 pm – 3:30 pm
Date: March 15th, 2018
Place: Room 3001
Christopher UDRY (Northwestern University) – “Selection into Credit Markets: Evidence from Agriculture in Mali”
Abstract: We find that returns to capital are higher for farmers who borrow than for those who do not. We measure this using a two‐stage loan and grant experiment. In our first stage, we offer loans to some villages and not others. In the second stage, we provide cash grants to a random subset of all farmers in villages where no loans were offered, and to a random subset of farmers who chose not to borrow in villages where loans were offered. We estimate  returns to capital for the representative sample of all farmers, whereas we find  return for those who had recently decided not to borrow. Critical for both theory and policy, this heterogeneity persists even after conditioning on a wide range of observed characteristics.