Impact Research Newsletter: 2022 Vol .1

Welcome to our roundup of interesting recent academic research by impact sector. This volume covers research from October to December 2021 and spans working papers, research briefs by think tanks and NGOs, and journal-published academic papers. Enjoy!

Education

• New study shows significant learning loss as a result of the COVID-19 pandemic, with the largest loss occurring in school districts with less in-person instruction: using data on COVID-19 schooling mode, test scores, and student demography from 12 U.S. states, researchers found an average reduction of 14.2 and 6.3 percentage points in math and English language arts (ELA) test scores during the 2020-21 school year compared to previous years. When factoring in the school districts’ instruction mode, researchers saw that offering full in-person instruction instead of fully hybrid or virtual instruction reduced test score losses in math and ELA by 10.1 and 3.2 percentage points. [Halloran et al. 2021]
• Reducing financial aid information barriers for low-income college applicants increases application to and enrollment in more selective universities: a large-scale, randomized control experiment tested the effect of early commitment of free tuition at the University of Michigan. While the intervention merely guaranteed students before application the same amount of grant aid they would qualify for if and when admitted, it increased applications rate from high-achieving, low-income students by 161% and enrollment rate by 125%. [Dynarski et al. 2021]
• Recent meta-analysis finds that around 40 hours of intensive reading instruction may be the optimal cumulative dosage for Grade K-3 students with reading difficulties: early reading interventions for students with or at-risk of reading difficulties are critical to reducing later reading disabilities and poor academic performance. However, increasing the dosage, or cumulative hours of instruction, of intervention may lead to diminished returns. Researchers examined 26 peer-reviewed studies to find that the effect size of reading intervention peaked at around 40 hours of instruction, after which the effects would be expected to decline unless the intervention is changed in a meaningful way. For students who have not adequately responded to instruction after 40 hours of intervention, 1:1 instruction may bring further improvement. [Roberts et.al. 2021]
• Investing additional educational resources for students with less severe disabilities on the margin of special education (SE) placement can offer large returns: a natural experiment leveraging a change in Texas’ state policy, which drastically reduced SE participation, finds that students who lost access to SE services were 2.7% less likely to complete high school and 3.6% less likely to complete college. These declines in educational attainment are mostly driven by marginal SE students, who had relatively mild disability types and already spent the majority of their day in general education classrooms. Removing SE access for these marginal students decreased their high school completion by 51.0 percentage points and college enrollment by 37.9 percentage points. A rough comparison suggests that providing additional educational resources to students with less severe disabilities can offer significantly larger returns than reducing classroom sizes or increasing school spending, at a level similar to highly effective early childhood programs such as Head Start or Perry Preschool. [Ballis and Heath 2021]

Financial Services

• A working paper finds that Airtel Money loans in Malawi expands credit access and helps customers meet their short-term financial needs, resulting in high levels of customer satisfaction: preliminary findings of a large scale RCT show that Airtel Money is increasing credit accessibility in Malawi, with 76% of studied borrowers reporting few to no alternative access to short-term financing options. 90% of customers are satisfied with the product, primarily due to its accessibility and the rapid disbursement of funds. Borrowers experienced a 23% increase in self-reported financial well-being despite the low average loan size of $2 USD because of their increased ability to meet short-term needs. The research also finds that improving the transparency of loan terms and conditions can further increase uptake. A financial literacy intervention aimed to increase awareness of loan terms increased borrowers’ likelihood of taking out a loan by 16% because 67% of participants learned the loans were less expensive than they originally believed. [Brailovskaya et al. 2021]
• New research finds pairing a savings product with microcredit can increase its impact potential: an RCT in Kenya finds that offering a simple savings product (savings lockbox) in addition to the harvest-time loan increased farm investment by 11% and household consumption 7%. [Mukherjee et al. 2021]
• A survey of women-owned microenterprises and SMEs in Indonesia finds that most women prefer to utilize informal credit for business investment because of the persistent barriers associated with formal credit: only 40% of women have accessed formal credit due to institutional barriers such as spousal approval requirements and intensive applications. Expanding collateral eligibility, removing spousal requirements, and reducing other transaction costs are necessary steps to increase women’s uptake of formal credit. [Innovations for Poverty Action]
• Current compensation structures for microfinance loan officers can create perverse incentives preventing qualified borrowers from graduating and accessing larger sources of formal credit: relatively few borrowers graduate from microfinance to larger, more formal sources of credit. A new study of a Chilean microfinance lender finds that loan officers withhold graduation endorsements from their most qualified borrowers because their compensation depends on the size of their client portfolio and repayment. Changing the compensation scheme to reward for graduating microfinance customers increased endorsement rate by 11% and led to 34% higher profitability for the lending organization as a result of better repayment behaviors from newly graduated borrowers. A back-of-the-envelope calculation suggests that strategic behavior of loan officers can account for $4.8-29.2 billion in lost social value from forgone borrower graduations in microfinance worldwide. [Rigol and Roth 2021]

Healthcare

• Low-cost mental health interventions can dramatically improve not only mental health outcomes, but also social and economic well-being in emerging markets: an RCT that delivered over-the-phone counseling for Bangladeshi women during COVID-19 reduced moderate to severe stress by 20% and depression by 33% relative to the untreated women after ten months. Moreover, treated women’s households saw a 22% reduction in the prevalence of food insecurity. [Institute for Labor Economics]
• Another large scale RCT on the impact of untargeted and group-based cognitive behavioral therapy (CBT) in rural Ghana finds that 12 weekly 90-minute sessions led to meaningful average increases in mental health (0.53 SD), socioemotional skills (0.27 SD), cognitive skills (0.08 SD), and economic outcomes (0.12 SD). [Barker et al. 2021]
• New study finds that improving gender match between female patients and doctors can reduce the well-documented gender disparities for health care and social services received by disabled women: past research has found that women are 20 percentage points more likely to have their disability insurance applications rejected than men with similar characteristics, with discrimination by medical practitioners regarded as the primary driver. A large scale RCT in Texas finds that women undergoing medical evaluations to receive government disability assistance are 5% more likely to receive disability classification and receive 8.5% higher benefits than women seen by a male doctor. [Cabral and Dillender 2021]
• Amidst growing concerns of burnout and mental health crises in the healthcare profession, new research finds that physicians are overprescribed serious drugs and are more prone to mental health conditions than non-physicians: in a natural experiment leveraging Netherland’s random lottery system for medical school acceptance, researchers find that becoming a physician increases the likelihood of having been prescribed antidepressants, opioids (+25%), anxiolytics (+20%), and sedatives (+61%), especially for female physicians. [Anderson et al. 2021]
• Higher health insurance provider payments can meaningfully increase healthcare utilization: a quasi-experimental research found that a policy reform that increased Medicare and Medicaid provider payment led to a 6.3% increase in the targeted services provided to eligible beneficiaries, which decreased the fraction of low-income beneficiaries with no primary care visit in a year by 9%.  [Cabral et al. 2021]
• Using a table salt substitute with 25% less sodium chloride can significantly decrease the risk of stroke, heart attack, and all-cause mortality for elderly populations: in a large-scale RCT of people over 60 with a history of stroke in rural China, researchers found that using a salt substitute with 25% less sodium compared to regular salt resulted in 13% lower stroke rate, 13% lower heart attack rate, and 12% fewer deaths over a five-year period.  [Neal et al. 2021]

Food and Agriculture

• Research evaluation finds rigorous evidence that aquaculture interventions in developing countries increased farmers’ productivity and household income: nearly half of all global fish production relies on aquaculture and is carried out primarily by small-scale farmers in developing countries. A recent systematic review of 21 interventions aimed at increasing or improving aquaculture-related activities in Bangladesh, Nigeria, Kenya, Cambodia, and Indonesia finds strong evidence that interventions geared at expanding or improving aquaculture activities improve productivity (+ avg. $53/year), household income (+ avg. $67/year), and nutrition intake (approx. 200 additional grams in monthly household fish consumption). [International Initiative for Impact Evaluation]
• Agrivoltaics can reduce the well-known trade-off between scarce land availability for renewable energy and agricultural activities while delivering economic and environmental co-benefits: the emerging land use practice of siting solar and agricultural operations together can help address the dual challenge of energy and food security in a low-carbon world. Rough estimates suggest agrivoltaic systems can maintain 80% of the efficiency of solar and agricultural production while revitalizing rural farming communities through solar leasing. Environmentally, the shade provided by the solar panels can improve water retention, stimulate plant growth, and maintain crop yield on farmland exposed to climate risks. Additionally, intentionally designed agrivoltaic systems can provide long-term ecosystem stability through vegetation management that increase pollination activity and soil carbon sequestration. [Pedersen and Lamb 2021]
• Adopting breakthrough technologies is required to substantially decarbonize the beef industry with policy support: A recent report by the Breakthrough Institute finds that the beef industry cannot reduce emissions solely relying on existing techniques such as composting manure. However, leveraging relatively low-tech “breakthrough” technologies such as breeding low-emitting cattle in tandem with current practices can increase the industry’s emissions reduction potential from 18% to 48% by 2030. [The Breakthrough Institute]
• Providing farmers with training is an effective, low-cost tool to increase farmer adoption of “climate-smart” agricultural practices: Many agricultural and environmental technologies require large upfront investments in exchange for longer-term benefits, making liquidity and credit constraints likely barriers to technological adoption. An RCT in Niger tested these barriers to adopt an agricultural technique that reduce land degradation and restore soil fertility. Nevertheless, researchers found little evidence that liquidity or credit constraints deter adoption. Providing farmers with training increased the share of adopters by over 90 percentage points, whereas adding conditional or unconditional cash transfers has no additional effect. This finding highlights the importance of training and technical knowledge transfer when introducing climate-smart agriculture practices and technologies. [Aker and Jack 2021]

Disclaimer:  Views presented in the linked articles are the author’s own and not representative of Y Analytics. For informational purposes only, not intended as investment advice. Content may not be comprehensive of all timely research within each sector.  Text is often drawn directly from cited sources