The interests of my lab lie at the intersection of development economics and behavioral economics/psychology. In particular, we ask whether poverty has particular psychological consequences, and whether and how these consequences, in turn, affect economic behavior. To answer these questions, we combine laboratory experiments with randomized controlled trials of development programs such as health insurance and unconditional cash transfers in Kenya and Sierra Leone. In one recent study, we found that unconditional cash transfers sent to poor Kenyan households by the NGO GiveDirectly led to substantial reductions in stress and depression among recipients; conversely, we have shown that negative income shocks induced by periods of low levels of rainfall lead to increased levels of stress. Our laboratory experiments have shown that such shocks, and the resulting stress, can affect economic behavior by making people less patient. Together, these findings suggest that poverty may perpetuate itself partly through a psychological feedback loop.
The Price of Poverty: Psychology and the Cycle of Need. Foreign Affairs (2014), 138739.
Household Response to Income Changes: Evidence from an Unconditional Cash Transfer Program in Kenya (with Jeremy Shapiro). November 2013.
On the Psychology of Poverty (with Ernst Fehr). Science 344 (2014), 862–867.