Jessica Goldberg

Lack of access to transportation has wide-ranging consequences for people living in remote, rural communities. They may be unable to get necessary medical care or access other social services. Their economic activities may also be limited. They may sell agricultural products and handicrafts for farm-gate prices that are lower than prices available in town, and pay higher prices for a limited selection of locally available inputs and commodities. We use a randomized controlled trial to measure both the demand for transportation between an isolated village and the nearest town center in rural Malawi, and the effect of access to transportation on various measures of household wellbeing. We operate a mini bus on a route with no current service by risk-averse bus owners who fear that the costs of service will be high and the demand for rides will be low. We randomly allocate bus passes with different round-trip fares to 542 households, and monitor ridership at different price points, biweekly time use for all participating households, and economic and health measures activities at baseline and endline. Our data will allow us to estimate the demand for transportation, the value of transportation to individuals, and its effect on the village economy.

A new interest in time preference is fueled by evidence of non-constant time discounting and a better understanding of its theoretical consequences. Models of (quasi) hyperbolic discounting are now commonly used to explain time-inconsistency and the self-control problems it generates. This paper reports the results of a field experiment in rural Malawi designed to evaluate, directly, the relationship between of time preference under commitment and time-inconsistency. The experiment used real choices over money to elicit time preferences from approximately 2,200 subjects. The stakes of the intertemporal choices were high, representing a total of about one month's wages, on average. A randomly selected subset of respondents was later approached in the two weeks prior to their first disbursement of money. These subjects were reminded of their initial choices and asked if they would like to revise them and thus exhibit time-inconsistency. Choices under commitment reveal important heterogeneity in basic consistency of choice, time preference, and dynamic consistency. When the commitment is broken, revisions are common, and they are only somewhat more likely to reallocate income forward in time. Following the theory, revisions are strongly associated with preferences under commitment.