Impact Research Newsletter: 2022 Vol .2

Welcome to our roundup of relevant and interesting recent academic research by impact sector. This volume covers research from January to March 2022 and spans working papers, research briefs by think tanks and NGOs, and journal-published academic papers. Enjoy!

Education

• Increasing operational spending in K-12 districts has positive effects on student’s test scores, dropout rates, and college enrollment: a recent study compared the impact of operational (eg, teacher compensation, class sizes) and capital (eg, new buildings, renovations) spending on student achievement in Wisconsin school districts using regression discontinuity design. Districts that increased operational expenditures by 3% (~$300/pupil) in the form of additional teachers and aides, higher average teacher compensation, and additional guidance counselors, school psychologists, and social workers saw an 8 percent of a standard deviation increase in test scores, a 9 percent decrease in dropout rate, and a 10 percent increase in postsecondary enrollment. Increase in capital expenditures in facility improvement had little impact on student achievement and outcomes. [Baron 2022]
• Contrary to most literature on the topic, new longitudinal study shows negative effects of a state-supported pre-K program, potentially due to difference in program and population characteristics: using education records from 2,990 low-income children who applied to oversubscribed pre-K programs across Tennessee, researchers found that children randomly assigned to attend pre-K had significantly lower achievement test scores in third through sixth grades compared to children who did not attend, with the strongest negative effects in sixth grade. Overall, the literature on pre-K is broadly supportive of high-quality programs, but not all programs are high-quality or created equally. This study stands in contrast to much of the literature, potentially due to a variation in program quality, demographics, geographies, and time period examined. [Durkin et al. 2022]
• A recent working paper suggests that re-allocating teachers within school districts can lead to gains in student achievement (0.05 standard deviation): researchers found that student achievement is maximized when the strongest teachers within a school district are split between teaching larger classes and working directly with economically disadvantaged students. The most effective tool for realizing this achievement gain is tying teacher bonus to achievement outcomes, which aligns the incentives for teachers, principals, and districts. [Bates et al. 2022]
• While recognizing differences in student populations, new research suggests that attending for-profit colleges can lead to adverse student loan outcomes compared to public universities, highlighting the importance of financial aid resources and career placement support: leveraging institution-level data on student debt, default, educational attainment, and labor market outcomes, researchers used an instrumental variable approach to find that enrolling in a for-profit institution increases the number of loans by one, increases the size of loans originated by over $3,300, and leads to an 11-percentage-point increase in the likelihood of loan default. This adverse debt effect is potentially explained by the higher tuition prices, lower completion rates, longer time-to-degree, and lower earnings post-attendance for for-profit college students. Nevertheless, for-profit colleges tend to serve students from more disadvantaged backgrounds and may be more responsive to student demand and the needs of the local labor market. Ensuring students enrolled in for-profit colleges have access to financial aid resources and career placement support may help improve student loan outcomes. [Armona et al. 2022]
• A working paper finds that vocational trainings that combine soft and technical skills have the highest long-run return: researchers used a randomized controlled trial in Egypt to compare the effectiveness of 4-week training programs that cover soft skills (grooming, time management, listening), technical skills (Microsoft, English language), and a mix of the two. In the short term (3-months), all three types of training boosted the participants’ probability of employment by 33%, while technical and mixed skills training raised income by 15 percent due to enhanced English language competency. In the long-term (18 months), participants who received mixed-skill training received 27% higher income than the soft skills group and 20% higher income than the technical skills group. This result demonstrates the importance of training curricula and skill complementarity. [Osman and Speer 2022]

Financial Services

• Alternative data and algorithmic underwriting models may enable fintech lenders to increase credit availability and lower credit costs: an analysis of anonymized administrative data from Upstart Network, which uses alternative data such as education and job history in its personal loan underwriting process, finds that 25% of Upstart’s funded borrowers would have been rejected by a traditional model because of their low credit scores and incurred a significantly higher interest rate. This research finds that borrowers who have low credit scores, short credit histories but low propensity to default are the “invisible prime,” and that funding loans to these borrowers can lead to better economic outcomes for the borrowers and higher returns for the fintech platform. [Di Maggio et al. 2022]
• Research finds that gender gaps persist in mobile banking and digital financial inclusion interventions: women use digital finance at lower rates than men. A randomized control trial in Bangladesh found that female and male migrants both increased adoption of mobile banking (by 51 percentage points and 46 percentage points) after participating in a job training program, however, the gender gap in mobile money usage persisted – men increased digital remittances by 11 times as much as women. The gender gap in mobile banking is consistent with the facts that female migrants earn less on average, face cultural barriers, and are less likely to live independently. [Lee et al. 2022]
• Researchers found that providing firms access to finance can have large private and social returns: a field experiment with 3,173 firms in China found that accessing loans had a large direct effect on the revenue and profit of firms themselves, as well as a similar-sized business-stealing effect on competitors. Moreover, loans had a positive effect on business practices, resulting in improved quality, reduced price, and net gains in consumer welfare. Through a model-based evaluation, researchers found that access to finance had a private return of 74%, mostly offset by losses of competitors, and a social return of 60%, mostly due to consumer gains. [Cai and Szeidl 2022]
• New research finds low usage of mobile financial services (MFS) for agricultural purposes despite widespread penetration, resulting in untapped benefits for smallholder farmers: survey in Kenya finds that despite 82% of farmers in Kenya already using mobile financial services, fewer than 15% of the farmers use MFS for agricultural purposes, and even fewer (1%) have used such services for agricultural loans. Increasing MFS usage for agriculture may be associated with higher input intensity, farming productivity, market orientation, and household incomes for smallholder farmers. [Parlasca et al. 2022]

Healthcare

• IDinsight conducted a quasi-experimental impact evaluation of Zipline’s operation in Ghana and found that Zipline improved overall medical products availability: Nearly 2 billion people across the world lack reliable access to high quality and essential medical products such as blood and vaccines due to gaps in supply chains and poor infrastructure. In Ghana, stockouts of routine medicines remain common throughout the system. IDinsight’s impact evaluation finds that Zipline increased the average number of products stocked by treatment facilities by 9.4%, increased overall product availability by 5.7 percentage points, reduced vaccine stockout duration by 60%, and increased healthcare worker satisfaction over the availability of medical products. [IDinsight 2022]
• Despite the promise of improved quality of patient care under Medicaid’s managed care model, significant racial disparities in patient experience remain: A large-scale observational study of Medicare enrollees examined patient experience metrics for white and minority enrollees related to ease of accessing care. Research finds that compared with white enrollees, minority enrollees reported significantly worse care experiences. Disparities in initial health care access and follow-up care ranged from 1.5-4.5 percentage points for Black enrollees, 1.6-3.9 percentage points for Hispanic/ Latino enrollees, and 9.0-17.4 percentage points for Asian American/Pacific Islander enrollees compared to white enrollees.  [Wilson et al. 2022]
• New research finds that higher-priced hospitals offer higher quality of care only in more competitive markets: Utilizing commercial insurance claims data in the U.S., a recent paper finds that patients treated by high-priced hospitals in less concentrated, more competitive markets (i.e., markets with a HHI of less than approximately 4,000) had a 1 percentage point (35%) lower likelihood of mortality. However, in markets with low competition, increased hospital spending had no impact on patient mortality, which supports concerns that low competition can enable hospital providers to exert market power, raising prices without improving health care quality to the detriment of patients. [Cooper et al. 2022]
• A review of biologic drugs subject to generic competition finds only moderate declines in drug prices, a marked contrast to the large cost savings observed by the entry of small molecule generics: With biologics comprising a large and growing share of overall U.S. drug spending, generic entry (facilitated by the 2010 Biological Price Competition and Innovation Act) can play an important role in containing insurance plans’ drug spending and reducing patient costs. In an analysis of non-insulin biologics currently facing biosimilar competition, researchers find that Medicare average sales prices fell at a modest level of 5.4-7 percentage points, casting doubt on the potential social value of biosimilars expansion. Researchers provide several explanations for this small effect, including commercial and Medicare insurance coverage that may favor brand name biologics, anti-competitive behavior by manufacturers, the lack of interchangeability between biologics and their biosimilars, and inadequate incentives for physician to switch to generics (as many biologics are administered in clinical settings). [Shahzad et al. 2022]
• Amidst growing concerns related to urban air pollution, new study finds long-term pollution exposure increases risk of auto-immune disease: The evidence of increased mortality and morbidity risk from air pollution has been mounting in recent years. In a large-scale observational study in Italy, researchers find that a 10µg/m³ increase in particulate matter (PM₁₀) was associated with a 7 percent increased risk of autoimmune disease. Chronic exposure to high concentrations of particulate matter was especially harmful. Individuals with chronic exposure to high PM₁₀ concentrations (>30µg/ m³) had a 12 percent higher risk of developing all autoimmune diseases while individuals with chronic exposure to higher PM_2.5 concentrations (>20µg/ m³) had a higher risk of rheumatoid arthritis and connective tissue diseases. [Adami et al. 2022]

Food and Agriculture

• A recent meta-analysis highlights research gaps and outstanding uncertainty on the impact of nano/microplastics on seafood quality and human health: researchers reviewed recent publication on microplastics to find that the available safety studies are inclusive, although there is an indication that prolonged exposure to high levels of orally administered microplastic can be hazardous for consumers. [Gündoğdu, et al 2022]
• A recent analysis finds that food security effects of biofuels depend on the type of feedstocks and country competitiveness: researchers compared the food security effects of biofuel production in Indonesia and Mexico from 2000 to 2013 to find that biodiesel production (Indonesia) positively influenced food security through an increase in daily per capita energy consumption and the food production index, whereas the opposite effect was found for bioethanol production (Mexico). This difference can be explained by the fact that biodiesel production uses some feedstocks that do not directly compete with food crops, and export revenues can be allocated to food imports. In contrast, bioethanol production uses maize, which is the main staple food of many Mexicans, and Mexican ethanol exports compete with those of the United States. [Boly and Sanou 2022]
• Researchers found that afforestation and non-CO2 emission (methane etc.) reduction measures under the 2 °C climate-stabilization scenarios could respectively put an additional 41.9 million and 26.7 million people at risk of hunger in 2050 compared to the current trend scenario baseline. Using six global agroeconomic models, researchers show the extent to which three factors—non-CO2 emissions (methane etc.) reduction, bioenergy production, and afforestation—may change food security and agricultural market conditions under 2 °C climate-stabilization scenarios. Results show that afforestation (often simulated in the models by imposing carbon prices on land carbon stocks) could have a larger impact on food security relative to non-CO2 emissions policies (generally implemented as emissions taxes). [Fujimori et.al. 2022]
• New study examines the environmental impact of global dietary consumption in 9 countries: researchers find that dietary consumption is the main use of water withdrawal for all the countries analyzed, with a higher water footprint associated with increased consumption of processed rice. In addition, total dietary carbon footprint is highest in countries with high animal product consumptions, and U.S. has the highest per capita dietary carbon footprint. [Fan et al. 2022]

Disclaimer:  Views presented in the linked articles are the paper authors’ 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.