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The effect of social pressure on expenditures in Malawi

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  • Goldberg, Jessica

Abstract

I vary the observability of windfall payments to 291 members of agricultural clubs in rural Malawi in order to study the effect of redistributive pressure on the timing of expenditures. While other studies have documented that social pressure affects the quantity of income and consumption, I focus on timing because spending money quickly may be a strategy for reducing obligatory transfers. Respondents who receive money in the presence of their agricultural club anticipate spending an extra 14 percent (0.28 standard deviations) in the week immediately following the payment than those who receive equivalent transfers in private settings. There are limited changes in the composition of spending, but some evidence that social pressure to share windfall income has a larger effect on poorer households.

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  • Goldberg, Jessica, 2017. "The effect of social pressure on expenditures in Malawi," Journal of Economic Behavior & Organization, Elsevier, vol. 143(C), pages 173-185.
    • Handle: RePEc:eee:jeborg:v:143:y:2017:i:c:p:173-185
    DOI: 10.1016/j.jebo.2017.09.005
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    2. T Le Cotty & E Maître d’Hôtel & R Soubeyran & J Subervie, 2019. "Inventory Credit as a Commitment Device to Save Grain Until the Hunger Season," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 101(4), pages 1115-1139.
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    5. Le Cotty, Tristan & Maître d’Hôtel, Elodie & Subervie, Julie, 2023. "Inventory credit to enhance food security in Burkina Faso," World Development, Elsevier, vol. 161(C).
    6. Marie Boltz & Karine Marazyan & Paola Villar, 2020. "Is Informal Redistribution Costly? Evidence from a Lab-in-the-Field Experiment in Senegal," The World Bank Economic Review, World Bank, vol. 34(Supplemen), pages 72-78.
    7. Abigail Barr & Mattea Stein, 2022. "Social status and egalitarianism in non-lineage-based, agrarian communities in sub-Saharan Africa: An analysis of funeral attendance," Discussion Papers 2022-01, University of Nottingham, CREDIT.
    8. Batista, Catia & Vicente, Pedro C., 2020. "Improving access to savings through mobile money: Experimental evidence from African smallholder farmers," World Development, Elsevier, vol. 129(C).
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    10. Fromell, Hanna & Nosenzo, Daniele & Owens, Trudy & Tufano, Fabio, 2021. "One size does not fit all: Plurality of social norms and saving behavior in Kenya," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 73-91.
    11. Emma Riley, 2024. "Resisting Social Pressure in the Household Using Mobile Money: Experimental Evidence on Microenterprise Investment in Uganda," American Economic Review, American Economic Association, vol. 114(5), pages 1415-1447, May.
    12. Hanna Fromell & Daniele Nosenzo & Trudy Owens & Fabio Tufano, 2019. "One Size Doesn’t Fit All: Plurality of Social Norms and Saving Behavior in Kenya," Discussion Papers 2019-12, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    13. Tristan Le Cotty & Elodie Maitre d'Hotel & Subervie Julie, 2019. "Inventory credit to enhance food security in Africa," CEE-M Working Papers hal-02018715, CEE-M, Universtiy of Montpellier, CNRS, INRA, Montpellier SupAgro.

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