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Friday, July 26, 2013

How Anti-Poverty Programs Go Viral

This is a summary of research by Esther Duflo, Abhijit Banerjee, Arun Chandrasekhar, and Matthew Jackson on the spread of information about government programs through social networks:

How anti-poverty programs go viral, by Peter Dizikes, MIT News Office: Anti-poverty researchers and policymakers often wrestle with a basic problem: How can they get people to participate in beneficial programs? Now a new empirical study co-authored by two MIT development economists shows how much more popular such programs can be when socially well-connected citizens are the first to know about them.
The economists developed a new measure of social influence that they call “diffusion centrality.” Examining the spread of microfinance programs in rural India, the researchers found that participation in the programs increases by about 11 percentage points when well-connected local residents are the first to gain access to them.
“According to our model, when someone with high diffusion centrality receives a piece of information, it will spread faster through the social network,” says Esther Duflo, the Abdul Latif Jameel Professor of Poverty Alleviation at MIT. “It could thus be a guide for an organization that tries to [place] a piece of information in a network.”
The researchers specifically wanted to study how knowledge about a program spreads by word of mouth, MIT professor Abhijit Banerjee says, because “while there was a body of elegant theory on the relation between what the network looks like and the speed of transmission of information, there was little empirical work on the subject.”
The paper, titled “The Diffusion of Microfinance,” is published today in the journal Science. ...
Microfinance is the term for small-scale lending, popularized in the 1990s, that can help relatively poor people in developing countries gain access to credit they would not otherwise have. The concept has been the subject of extensive political debate; academic researchers are still exploring its effects across a range of economic and geographic settings.
“Microfinance is the type of product which is very interesting to study,” Duflo says, “because in many cases it won’t be well known, and hence there is a role for information diffusion.” Moreover, she notes, “It is also the kind of product on which people could have strongly held … opinions.” So, she says, understanding the relationship between social structure and adoption could be particularly important.
Other scholars believe the findings are valuable. Lori Beaman, an economist at Northwestern University, says the paper “significantly moves forward our understanding of how social networks influence people’s decision-making,” and suggests that the work could spur other on-the-ground research projects that study community networks in action.
“I think this work will lead to more innovative research on how social networks can be used more effectively in promoting poverty alleviation programs in poor countries,” adds Beaman... “Other areas would include agricultural technology adoption … vaccinations for children, [and] the use of bed nets [to prevent malaria], to name just a few.”  ...

    Posted by on Friday, July 26, 2013 at 12:15 AM in Academic Papers, Economics | Permalink  Comments (1)



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