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Premier multi-disciplinary autonomous public research organization

BDS Current Issue Volume XXXVIII December 2015 Num.4

Anchoring Effect in Context of a Familiar Good: A Case Study of Irrigation Water Supply in Rural India

Author: DURBA BISWAS

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Literature shows that the presence of anchoring effect invalidates contingent valuation results. However, studies from developing countries have not addressed this phenomenon adequately. In this paper, indication of anchoring effect was tested using results from a contingent valuation exercise for a familiar good – canal irrigation water used by farmers – in a rural region of India. A single bound dichotomous choice question was followed up by a final open-ended question about the respondents’ maximum willingness to pay for improved water supply. Anchoring effect was not detected which is consistent with the argument that familiarity reduces anchoring. Furthermore, validity tested through a scope insensitivity test shows that the estimated economic values are valid.

The Impact of China's Economic Activities in Africa on Economic Growth of African Countries

Author: MICHALE EHIZUELEN MITCHELL OMORUYI

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Narrowing development gaps has been a critical issue globally. This paper aims to investigate the role of Chinese FDI, trade and aid in narrowing development gaps with respect to the growth performance of economies in that region. Using a Solow-type growth model and panel data for the period 1991 to 2011, this paper reveals that African economies that export natural resources have benefited from positive terms-of-trade effects. In addition, there is evidence for displacement effects of African firms due to competition from China. Chinese foreign investment and aid in Africa do not seem to have an impact on growth. 

Returns to Agricultural Microcredit: Quasi-experimental Evidence from Bangladesh

Author: SAYEMA HAQUE BIDISHA & AKIB KHAN & BAZLUL HAQUE KHONDKER & KHALID IMRAN

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Using nationally representative household survey and utilising suitable quantitative tools, this study provides evidence in favour of the positive effect of participation in a credit programme on agricultural production. Our estimates suggest that credit had significant contribution towards household crop production–in comparison to an otherwise similar household without credit. Credit recipient households were found to produce significantly greater amount of agricultural commodities.

Who Benefits Most from Microfinance in Bangladesh?

Author: SHAHIDUR R. KHANDKER & M. A. BAQUI KHALILY & HUSSAIN A. SAMAD

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This paper examines the heterogeneous impacts of microfinance intervention in rural Bangladesh using a long panel survey data expanding from 1991/92 to 2010/11. Heterogeneity in programme effects may arise due to household (such as landholding, head’s education, employment or skills in oral math) and community (electrification and accessibility) characteristics. Benefits do vary by such characteristics. For example, large and medium holders benefit more than marginal or small holders from microfinance in non-land asset, net worth and labour supply. Beneficiary households whose heads completed primary education experience higher gains in non-land asset and net worth than those whose heads did not complete primary education. Also, having adults with competency in oral math (supposedly helpful in augmenting in entrepreneurial skills) helps the households benefit more. Beneficiaries in villages with electricity and better road access benefit more than those in villages lacking electricity or access. Quantile regression estimates show that, with the exception of the effects of male borrowing, lower income households benefit more than higher income ones. Finally, this paper shows that households with older heads or more adult males are likely to drop out from microfinance, so are those with adults with less competency in oral math. However, programme dropouts are not large enough to affect the overall benefits of microfinance.

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