An accurate understanding of how policies and programs affect individual and household welfare requires correctly modeling household decision making. This dissertation examines standard assumptions of the collective model that household members achieve efficiency (Essays 1 and 3), have perfect information (Essays 2 and 3), communicate, and make binding commitments (Essay 3). I analyze the theoretical implications of relaxing these assumptions and empirically assess how well these assumptions reflect reality in diverse contexts. The first essay calls into question the assumption that households in rural Ethiopia operate on the Pareto efficient frontier. The second essay examines differences in spouses' responses to questions regarding women's asset ownership and participation in household decisions in Nepal, and what these differences tell us about women's well-being. The third essay analyzes how introducing cellular network access in the Philippines affects wives’ control over household resources and information asymmetries between spouses.

Do Property Rights Affect the Efficiency and Intrahousehold Labor Allocations of Rural Ethiopian Households?

If the share of land that a husband or wife claims in divorce differs from his or her share of other assets, does this induce inefficient allocations of productive resources? To address this question, the first essay examines the effects of two policies that altered the distribution of property rights upon marital dissolution in Ethiopia: (1) joint land certification, which shifted land rights from husbands to both husbands and wives and (2) changes to regional Family Codes, which shifted non-land rights from husbands to a more equal division between spouses. Using two-way fixed effects, I analyze both panel and repeated cross-sectional data from rural Ethiopia. My results suggest that, when regional Family Codes are in place, joint land certification increases real household consumption per capita and the probability of being above the poverty line relative to households governed by head-only certification. Next, I examine whether changes in time allocated to off-farm wage labor explain the implied inefficiencies in household production under certain policy combinations.

Spousal Concordance in Joint and Separate Households: Survey Evidence from Nepal

In household surveys, husbands and wives who are asked the same set of survey questions often provide different responses. Using data from Nepal, the second essay studies patterns of concordance between spouses on survey questions regarding household asset ownership and decision making. We analyze these patterns separately for couples that reside with the husband’s parents and those that do not. We find that wives are much more likely than husbands to report their own participation in asset ownership and decision making, in both joint and separate households. In joint households, wives are also more likely to report that others own assets and make decisions. Wives reporting that they own assets or make decisions is correlated with some improved measures of wives’ well-being, regardless of whether there is concordance between spouses. Concordance is not necessarily correlated with better outcomes for women, particularly when the point of agreement is that the wife does not own assets or make household decisions.

Call on Me: The Impact of Communication on Intrahousehold Information Asymmetries in the Philippines

In the final essay, I develop a conceptual framework to understand how communication affects information asymmetries and monetary transfers between spouses in the Philippines. I posit that increasing spouses’ ability to communicate increases the cost of hiding or withholding income from one’s wife and reduces the cost of monitoring one’s husband. Using data from the first randomized control trial to provide communities with mobile networks access, I find suggestive evidence that this intervention increased transfers from husbands to wives by reducing information asymmetries between spouses. I also present experimental games that could be conducted with spouses in order to test the implications of the model.

Drawing on theory from development economics and industrial organization, I study the economics of rural firms and markets to understand how different types of shocks affect firm operations. I examine three types of shocks: technology, weather, and prices. I use a combination of randomized experimental variation and quasi-experimental variation to identify the effect of each type of shock on small firm outcomes. The primary outcomes are relational contracting with suppliers and customers, firm performance (sales, profits, hiring of workers), number of competitors, and changes to input and output prices.

In the first essay, I evaluate how a technology shock designed to lower search costs affects how firms interact with their suppliers and customers. For small firms, search frictions interfere with learning about new suppliers in their upstream market, and raise the cost of meeting new customers in their downstream market. Using a randomized experiment of 507 small firms, I study the impact of a digital phonebook that lowers the cost of accessing new business and customer contacts. Participating firms are split into a control and treatment group with two variations: 1) a phonebook listing that is visible to upstream suppliers in urban areas, and 2) a phonebook listing that is visible to downstream customers in rural areas. I find that treated firms increase relational contracting with their suppliers and decrease it with their customers. Yet, there is no strong evidence that the number of new customers or suppliers increases. This pattern suggests that being listed in the phonebook caused firms to update their valuation of relational contracts and respond by negotiating better terms with suppliers and customers.

In the second essay, I study how a weather shock that lowers agricultural production affects rural firms whose customer base experiences crop losses. In the absence of insurance and credit markets, the effect of adverse weather shocks on rural firms is ambiguous because drought shifts both demand and supply curves. I use spatial and temporal variation in the 2016-2017 drought in Kenya to characterize the direct and indirect effects of drought-induced food insecurity on local firm outcomes. Firms in areas directly affected by drought have lower sales, profits, and hire fewer workers than firms in non-drought areas. Firm entry also increases in drought areas compared to non-drought areas, consistent with prior evidence that farming households form new businesses as a coping strategy following shocks. Subsector analysis reveals substantial heterogeneity. Service firms fare better than retail firms. But examining retail sub-sectors shows that firms selling higher-value food products (meat/fish and fruits/vegetables) experience greater declines than staple grain sellers in markets directly affected by drought, while firms selling high-value foods increase sales in non-drought areas. This is consistent with consumers in drought regions decreasing consumption of non-necessities.

In the third essay, I explore how input price shocks passthrough to consumer prices for rural and urban firms. Price variation is a typical feature of markets in developing countries. Rural firms face substantial price variation when purchasing goods (inputs) that they re-sell as outputs. How much of this input variation passes through to prices for rural customers? Rural households rely on local businesses to purchase household food staples and other essential commodities. Yet, relatively little economic literature examines retail passthrough rates of these essential food staples to clarify how it affects local food security. I use a panel of input and output prices for 230 urban firms and 240 rural firms to evaluate passthrough from idiosyncratic input price shocks on key commodities sold through urban-to-rural supply chains. I find that rural firms smooth both negative and positive input price shocks more than urban firms. By exploring possible mechanisms, I find suggestive evidence that smaller community size is associated with lower output prices, suggesting that social ties may play a role. At the same time, competitive pressure matters as well - rural firms who face new entrants and have higher absolute number of competitors have higher passthrough rates, consistent with a competitive market framework.

Development interventions are commonly piloted by organizations with strong community ties. Reminding beneficiaries that a pilot is being evaluated may prompt them to take costly actions that reflect favorably on the implementer. We test for this form of desirability bias in an evaluation of an unsuccessful agricultural extension pilot that ultimately drove treated farmers away from the target crops. Making the evaluation salient during endline data collection led participants to neutralize this negative treatment effect by altering input purchases and cultivation patterns. Participants’ desire to support implementers can help explain why promising pilot results frequently fail to replicate at scale.

This dissertation adds to our understanding of how mobile phones play a role in improving development opportunities. They not only provide a channel to communicate with others, but generate troves of data about the economic lives of subscribers. I contribute to the literature by examining three aspects of the potential of cell phones as development tools.

In chapter one, I study the most widespread form of digital credit: airtime loans. This service allows prepaid customers to borrow small airtime advances for a fee instead of purchasing recharges that must be paid upfront. Relying on rich administrative data from a mobile network operator in Haiti, I show access to loans increases total communication expenditure by 16% but with distinctly heterogeneous impacts. When airtime loans become available, poorer customers more than double their mobile communication spending, while access to loans leaves expenditure of the highest tercile unchanged. These differences exist despite relatively uniform patterns of loan usages between the poor and non-poor. I argue these differences are driven by distinct motivations for requesting airtime loans, with poorer customers using the loans to relax short-term liquidity constraints at critical communication times whereas non-poor customers primarily use these loans for convenience, as it gives them more discretion in when to visit airtime vendors.

In chapter two, I build on the evidence that demonstrates mobile phone metadata, in conjunction with machine learning algorithms, can be used to estimate the wealth of individual subscribers, and to target resources to poor segments of society. This paper uses survey data from an emergency cash transfer program in Haiti, in combination with mobile phone data from potential beneficiaries, to explore whether similar methods can be used for impact evaluation. A conventional regression discontinuity-based impact evaluation using survey data shows positive impacts of cash transfers on household food security and dietary diversity. However, machine learning predictions of food security derived from mobile phone data do not show statistically significant effects; nor do the predictions accurately differentiate beneficiaries from non-beneficiaries at baseline. Our analysis suggests that the poor performance is likely due to the homogeneity of the study population; when the same algorithms are applied to a more diverse Haitian population, performance improves markedly. We conclude with a discussion of the implications and limitations for predicting welfare outcomes using big data in poor countries.

In chapter three, I provide evidence on the determinants of the adoption of mobile money services. In contrast with previous research that centers on adoption after a service is launched, I study a mature platform that experiences a stagnating user base. I combine a survey with a randomized component with mobile money transaction logs to test if informational videos induce people to open an account and try new products. My results show that awareness of mobile money services is high and, even if having an account is free, many people use the service indirectly by asking others to make transactions for them. The intervention increased adoption by 5.4\%. However, a large share of new users came from the group that declined the opportunity to watch the videos, indicating more than simply information drove their decision to adopt. I do not find the videos increased the usage of additional services by people with an account at the time of the survey. Taken together, my results show further growth of the mobile money platform requires increasing the number of services available to attract additional customers and incentivize the daily usage of mobile money for economic transactions.

Human capital development is crucial for economic growth. Policymakers must understand the factors influencing human capital accumulation since they may vary by setting and sector. For example, micro-enterprise employees enhance their skills through on-the-job training or vocational programs. In educational institutions, family and school investments and peer interactions can affect human capital growth. Studies show that characteristics of peers, such as the gender of a classmate, can impact academic performance in elementary school. Other research has highlighted the importance of homophily in social network formation. Other research has highlighted the importance of homophily in social network formation. The latter is especially important in higher education settings, where individuals are mature and can thus engage in assortative matching based on characteristics such as shared identity. Thus, the ethnicity of peers may also play a crucial role in human capital development in settings of ethnic diversity.

The first essay in this dissertation quantifies high-ability and coethnic peer effects in higher education located in an ethnically diverse setting. While empirical research has documented the negative impact ethnic diversity has on several political and economic outcomes in Sub-Saharan Africa, including economic growth, political engagement, conflict, and contributions to public goods, we know relatively little about educational peer effects in such settings, which are generally characterized by high ethnic diversity and cross-ethnic mixing. This chapter studies the effect of coethnic and high-ability peers in student groups on academic outcomes at a large public university in Uganda, a country with pronounced ethnic heterogeneity and segregation. I link data on student-level university admissions with subsequent grades. Upon admission, dorm assignments are random conditional on gender, providing exogenous variation in peer group formation. On average, high-ability peers (irrespective of ethnicity) and coethnic peers (irrespective of ability) positively affect a student’s performance. Whereas the coethnic peer effect disappears by the year of graduation, the high-ability peer effect persists and even increases in magnitude over time. Lastly, I find that the effect of high-ability coethnic peers on performance is statistically indistinguishable from that of high-ability noncoethnic peers.

The second essay uses a causal forest algorithm to analyze heterogeneity in coethnic peer effects by estimating a grade dose-response function and treatment effects resulting from interethnic relations. Specifically, I train the causal model to optimize heterogeneity in students’ characteristics, including ethnic groups. This model predicts each student's conditional average treatment of coethnic share while doing data-driven sample splits to estimate heterogeneity. I find that coethnic peer effects are strongest for the largest ethnic group. This is the group that portrays more ethnic attachment than other ethnic groups in this setting. I also find the lowest effects for the second-largest group, which controls the central government and is thus likely to identify more with national identity than tribal identity.

The last essay uses a field experiment to examine how employers select employees for training and the demand for training from employees. Along with collaborators, I elicit employers’ beliefs about which of their employees it would be socially optimal to train and their preferences over which employees they choose to train. I then investigate whether employers’ selection of workers is individually rational. Finally, I measure employees’ self-selection into training and their alignment with employers’ selections. To ensure incentive compatibility of employer and employee choices, I provide employees from a sample of metalworking SMEs with free, high-quality skills training. Additionally, I conduct practical skills tests to measure employee metalworking skills before and after training. My analysis shows that owners perceive that training improves the quality of a trained worker. Yet, when offered the opportunity to choose an employee for training, they do not select workers whose quality would improve the most from training. Instead, they choose workers with ties to the firm, as those workers are perceived to be most profitable post-training but would not gain the most from training.