Education

• 10 randomized field experiments conducted in Argentina, Belize, Paraguay, and Peru show that Inquiry and Problem based Pedagogy (IPP) can increase math and science scores. IPP teaches students core topics in science and math, through inquiry and collaborative real-life problem solving, helping them perform more complex activities in a structured-guided way. The study indicates that IPP increased math test scores by 0.18 standard deviations and science test scores by 0.16 standard deviations after a 7-month program. The effect sizes also exhibit external validity meaning showed similar results across different contexts, geographies, national curriculum, teacher backgrounds, and grades (i.e., preschool, 3rd, and 4th grade).  The study also shows substantially better results for boys than girls. (NBER)
• A study of 42 countries finds that owning books is associated with better academic performance. The researchers tested whether the presence of books in the home, which they describe as indicative of a “scholarly culture”, is related to cognitive skill development and better academic performance.  The results showed that books are associated with a statistically significant impact on academic performance in every one of the 42 countries, as measured by the international standardized test, PISA. In the US, the difference between households with a one-book home library and those with a 500-book library, is equivalent to two-and-a-half additional years of school for children.  The findings held true even after controlling for other influences on educational performance including parents’ education, parents’ occupation, and family wealth.  It is important to note however, that families with more books are also more likely to model strong reading behavior—reading aloud to children, encouraging reading for fun—and books alone may not be the sole driver.  In the same vein, studies that have looked at the effect of summer reading programs have typically found a stronger effect for programs that involve other support or behavioral nudges (e.g., personalized encouragement from teachers) than programs that only involve giving away books—though the evidence is mixed overall. (Social Forces Journal, US Dept. of Education)
• The 2019 State of EdTech Report indicates appetite for evidence among investors and a shift in K-12 investment from curriculum-based products to tools supporting teachers and streamlining school operations. The report highlights trends from 2016-2018 which show fewer deals in curriculum products. Whilst some investors are driven to invest in curriculum products because schools and districts are becoming better positioned to consider digital curricula than a few years ago, others are more hesitant given the increasing availability of open educational resources and free content.  Investors also report that they are increasingly looking to fund products that show evidence of impact on learning outcomes in addition to revenue and are looking for products with a combination of business models instead of single strategy business models. Among curriculum products, English Language Arts tools have seen the largest increase in funding since 2016 while funding for tools that support language learning has been more sporadic.  Products that teach coding have also become the front runner in funding over products in other STEM areas. (EdSurge)
• A recent study published by Mathematica shows that students attending KIPP schools are more likely to enroll in four-year colleges. The randomized controlled trial tracks 1,177 students who applied to KIPP a decade ago and measures the impact of receiving the KIPP admission offer (intent-to-treat) and eventually attending the program (treatment-on-treated), to those who did not receive the offer. Results show that students who received the offer and those who attended KIPP were 6.9% and 12.9% more likely to enroll in college within two years of graduating. The study also finds a higher but not significant difference in KIPP students who stayed enrolled in college for two years. (Mathematica)

Energy

• Economic assessments of the risks of climate change underestimate the most serious consequences for lives and livelihoods. New research from The Grantham Research Institute on Climate Change Economists at the London School of Economics finds that economists have been wholly omitting or underestimating risks of climate change because the impacts are difficult to quantify and lie outside of human experience to date. These impacts include sea level rise, stronger cyclones, extreme heat, more frequents floods and droughts and the collapse of ecosystems and biodiversity, which could potentially lead to mass migration, displacement and conflict, with huge loss of life.  The paper argues that economic assessments that only articulate the effect of these risks on GDP or only extrapolate from past experience do not provide a clear indication of the threat to lives and livelihoods.  (The Grantham Research Institute, The New York Times)
• When deployed strategically, energy storage can be an important contributor to the transition towards a more flexible and sustainable electricity system. Although economically valuable, storage is not fundamentally a “green” technology, and its impact depends on how and where it is used. Recent research warns that assimilation of energy storage could result in an unintentional increase of grid emissions. For example, Hittinger and Azevedo, 2015 show that a revenue maximizing operating model for bulk energy storage based on electricity price arbitrage could increase electricity system emissions. (Vox)
• Anticipating wildfires, California utility PG&E initiated a large round of precautionary power cuts in October that left more than 700,000 homes without power. While utilities have long been viewed as safe investments, climate change has disrupted that assumption in California, where PG&E is in bankruptcy proceedings, in what The Wall Street Journal is calling “the first climate-change bankruptcy.” The utility may be liable for more than $30 billion in damages from wildfires in 2017 and 2018, and also told the U.S. District Court for the Northern District of California this month that its system may have contributed to nine wildfires of 10 acres or larger in 2019, including two attributed to vegetation and one to equipment. (The New York Times)
• In the wake of large hurricanes that have left millions without power in recent years, Florida has passed legislation requiring the state's investor-owned utilities to file storm protection plans. The law also allows a separate charge, outside of a utility's base rates, to pay for undergrounding power lines each year. While opponents and critics say that this law could raise customer bills, it also presents an opportunity for utilities to invest in grid resilience infrastructure like underground power lines. (Tampa Bay Times, The Florida Senate)

Financial Services

• A working paper by Banerjee, Duflo (recent Nobel prize recipients), Breza and Kinnan finds that in India, microcredit had persistent benefits for households that were already running a business before microcredit entered the neighborhood. Six years after the entry of microcredit, the treated “gung-ho entrepreneurs” (GE), from households that were already running a business before microfinance entered, had 35% more assets and generated double the revenues as those in control neighborhoods.  No effects were found for other non-GE households. This paper complements their earlier paper published in 2015 which had found similar effects but in the short-term (two years after the entrance of microcredit). (NBER)
• An experiment in Missouri finds that credit builder loans (CBL) improved credit scores for those with no pre-existing loans, while worsening scores for those with pre-existing loans. 56% of Americans have subprime credit scores, with low-income Americans particularly affected. Consumers with nonexistent or poor credit scores typically face limited access to credit and high prices for loans. CBLs, secured credit cards, and other low-risk forms of credit are often touted as potential credit-building options, but it is unclear if consumers actually improve their scores and use the credit to their benefit. Results show that overall, being offered the CBL did not affect credit scores, though the effect differed based on whether participants had pre-existing debt before the study. CBLs increased the likelihood of having a credit score and improved credit scores for individuals who did not have loans at the beginning of the study. However, there is some evidence of negative effects on individuals with pre-existing debt—perhaps most strikingly, the CBL increased overall non-CBL delinquency among those who had pre-existing loans, despite the product’s seemingly modest liquidity requirements.  (NBER, IPA)

• A working paper from Liliana Olarte (Y Analytics) finds that a new consumption credit product in Paraguay which targets unbanked individuals, improved access to finance without increasing default—but only for those previously unknown to the financial sector. In Paraguay, access to formal loans is low in part because traditional banks often require collateral or other guarantees which are not available for low-income individuals. In recent years, formal banks have entered the low-income market through scoring or other tailored screening mechanisms; however, it was unclear if this increased access would be beneficial or leave customers with unrepayable debt and reports to the bureau. The authors used customer scoring from a formal bank in Paraguay that was offering a new credit product to compare individuals who were barely rejected (control group) with individuals that were barely accepted (treatment) using a regression discontinuity design. Results show that for applicants who were previously unknown by financial entities, obtaining access to formal credit for the first-time opened doors to new opportunities in the financial market without negative impacts on credit scores or increasing defaults. However, for those applicants who had previously interacted intensively with the credit market, the intervention led to increased likelihood of having unpaid debt and worsened credit scores.  (NEUDC Conference)

Food and Agriculture

• Investment in global food systems has the potential to reduce negative health, environmental, and economic externalities by nearly $6T per year. A report by the Food and Land Use Coalition (FOLU) estimates that the global food system causes $12T annually in negative externalities. This includes $7T in environmental impacts, $3T in negative health outcomes, and $2T in economic losses—including food waste and rural welfare. The report advocates for investments totaling $300 to $350B per year in rural infrastructure, extension services, financing for smallholders, education for girls, family planning, regenerative agriculture practices, payments for ecosystem services, and nutritious food. With these investments, the report estimates that the food system’s negative externalities could be reduced by $5.7T annually by 2030. (Nature; FOLU)
• Increases in agricultural productivity generally have a larger poverty-reduction effect than comparable increases in industry or services productivity. A study published in World Development finds that, in developing countries, an agriculture productivity increase equal to one percent of GDP reduces poverty by roughly double the rate of similar productivity improvements in industry or services. A separate report published by the World Bank outlines interventions to support agriculture productivity growth within developing countries. The report recommends encouraging private investment through regulatory reforms including strengthening intellectual property rights, ending monopolies by government-owned enterprises, removing input subsidies favoring existing products, and simplifying burdensome regulations. The report also suggests that private investments could play a role by investing in infrastructure—such as cold-chain facilities and designated trading areas. (Ivanic and Martin, 2018; Fuglie et al., 2019)

• CGIAR has released recommendations to improve the measurement, reporting, and verification of soil carbon sequestration. Current estimates of the sequestration potential of soil vary widely. Fuss et al. (2018) estimate the annual technical potential of soil organic carbon (SOC) content to be 2-5 GT CO2per year. To improve the credibility and reliability of SOC research, CGIAR recommends adopting an integrated monitoring system approach for SOC measurement. The authors suggest incorporating seven measurement techniques: long-term benchmark sites to measure SOC content, short-term benchmark sites, remote sensing of soil characteristic and land cover, models to infer trends from benchmark site data, spatial models to simulate SOC changes, farmer surveys of management practices, and verification of self-reporting via spot checks or remote sensing.  The report also highlights FAO’s recently established Global Assessment of SOC Sequestration Potential (GSOCseq) program for building international capacity to measure SOC. (Smith et al., 2019; Fuss et al., 2018)

• New paper finds that subsidies can promote technology adoption among farmers in developing countries. Given the importance of technology on economic development, researchers explored whether short-term subsidies can encourage sustained adoption of technologies. Using grain storage technology as an example, the researchers found that large initial subsidies for some technologies can promote experiential learning and increase willingness to pay for the technology once the subsidy is discontinued. They also found that households that are less likely to take-up technology (due to credit constraints, risk, or lack of credible information) are also those that stand to benefit the most, suggesting that subsidies should target those who are less willing to pay. (NEUDC Conference)

Healthcare

• A global study estimates $200-328B additional investment per year in primary healthcare (PHC) is needed to meet the needs of low- and middle-income countries. The authors looked at three measures of PHC systems related to outpatient care, inpatient care, and cross-sectoral activities. In low-income countries, an estimated $48 per capita per year of additional investment is needed to meet the healthcare needs of the local population. Adequate investment in PHC systems is projected to avert 60M deaths and increase average life expectancy by nearly 4 years. (The Lancet)
• New research quantifies substitution effects of convenient primary care on emergency service utilization in the UK. The paper utilizes the Equitable Access to Primary Medical Care policy reform, which provided 100 new primary care facilities, as a natural experiment to demonstrate that greater access to convenient primary care reduces emergency department (ED) visits by 5-20%. However, the lower unit costs of care provision in clinics relative to EDs was insufficient to offset the costs associated with new utilization of healthcare services. The author does not study the reform's effects on welfare or health outcomes. (Journal of Health Economics)
• Pay-for-performance (P4P) associated with reduced stroke risk among Taiwanese type-2 diabetes patients. In Taiwan, the P4P program has been implemented for diabetes, and certified physicians can voluntarily enroll patients. The P4P program was associated with a 3% reduction in overall stroke risk and 13% reduction in hemorrhagic stroke risk. P4P is significantly associated with reduction in stroke risk for male patients, but not for female patients. (The BMJ)

Infrastructure

• Study finds that bus rapid transit system (BRT) in Ghana reduced commuting time by about 18% but did not dramatically change how people commute. The modern, high-capacity bus system was introduced in 2016 to relieve congestion and reduce transit costs for commuters in Accra.  Within 18-months, the system reduced average commute times; however, the BRT had no significant impact on the preferred mode of commuting--informal minibuses remained the most common means of commuting, followed by walking. This may be because commuters did not perceive the BRT system to be faster (due to limited right-of-way provisions) or did not feel that the BRT system would be sufficiently cheaper (due to the absence of sanctions to make it relatively expensive to use private cars). The paper recommends that governments incentivize use of public transit by investing in increased coverage of dedicated right-of-way lanes for buses and imposing sanctions on private transportation. (Abeka-Nkrumah et al., 2019)
• Working paper from the World Bank predicts that improved transport infrastructure will lead to a 3.4% increase in GDP for participating countries and 2.9% increase in GDP for the world. The paper assesses changes in trade costs due to improvements in transportation infrastructure through China's Belt and Road Initiative which will connect 55 participating countries across Europe, Asia, and Africa. However, the gains from trade are highly asymmetric--in fact, three countries (Azerbaijan, Mongolia, and Tajikistan) will experience welfare losses, as infrastructure costs outweigh gains. The predicted welfare effects of the initiative could increase by a factor of four if participating countries were to reduce the delays at the border and tariffs by half. (World Bank)
• One of Africa's largest telecom tower leasing companies, Helios Towers, debuts on the London stock exchange after delay. The company rose 5.7% on its first day of trading after raising $364M USD following a delay amid concerns of political stability in some of its African markets. Helios has more than 6,800 towers across five African countries and the money raised from selling new shares will help it roll out fourth-generation mobile services and keep pace with the growing mobile data consumption on the continent (mobile subscribers in Africa are projected to surpass 600M by 2025). Like many businesses operating in Africa, electricity remains a major challenge for tower companies. To cut down on costs, many companies are investing in lithium-ion batteries and solar power, which in turn may lead to reduced emissions. (Bloomberg; QZ)

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.