Rema Hanna

Submitted
Hanna, Rema, and Iqbal Dhaliwal. Submitted. “Deal with the Devil: The Successes and Limitations of Bureaucratic Reform in India”.Abstract

Employing a technological solution to monitor the attendance of public-sector health care workers in India resulted in a 15 percent increase in the attendance of the medical staff. Health outcomes improved, with a 16 percent increase in the delivery of infants by a doctor and a 26 percent reduction in the likelihood of infants born under 2500 grams. However, women in treatment areas substituted away from the newly monitored health centers towards delivery in the (unmonitored) larger public hospitals and private hospitals. Several explanations may help explain this shift: better triage by the more present health care staff; increased patients’ perception of absenteeism in the treatment health centers; and the ability of staff in treatment areas to gain additional rents by moving women to their private practices and by siphoning off the state-sponsored entitlements that women would normally receive at the health center at the time of delivery. Despite initiating the reform on their own, there was a low demand among all levels of government–state officials, local level bureaucrats, and locally-elected bodies—to use the better quality attendance data to enforce the government’s human resource policies due to a fear of generating discord among the staff. These fears were not entirely unfounded: staff at the treatment health centers expressed greater dissatisfaction at their jobs and it was also harder to hire new nurses, lab technicians and pharmacists at the treatment health centers after the intervention. Thus, this illustrates the implicit deal that governments make on non-monetary dimensions—truancy, allowance of private practices—to retain staff at rural outposts in the face of limited budgets and staff shortages.

deal_with_the_devil_wp_-_dec_2013.pdf
Banerjee, Abhijit, Rema Hanna, Jordan Kyle, Benjamin A. Olken, and Sudarno Sumarto. Submitted. “The Power of Transparency: Information, Identification Cards and Food Subsidy Programs in Indonesia”.Abstract

Can governments improve aid programs by providing information to beneficiaries? In our model, information can change how much aid citizens receive as they bargain with local officials who implement national programs. In a large-scale field experiment, we test whether mailing cards with program information to beneficiaries increases their subsidy from a subsidized rice program. Beneficiaries received 26 percent more subsidy in card villages. Ineligible households received no less, so this represents lower leakage. The evidence suggests that this effect is driven by citizen bargaining with local officials. Experimentally adding the official price to the cards increased the subsidy by 21 percent compared to cards without price information. Additional public information increased higher-order knowledge about eligibility, leading to a 16 percent increase in subsidy compared to just distributing cards. In short, increased transparency empowered citizens to reduce leakages and improve program functioning.

rwp15_010_hanna.pdf
2016
Hanna, Rema, and Paulina Oliva. 2016. “Implications of Climate Change for Children in Developing Countries.” Future of Children 26 (1). Publisher's Version implications_of_climate_hanna.pdf
Hanna, Rema, Eva Arceo, and Paulina Oliva. 2016. “Does the Effect of Pollution on Infant Mortality Differ Between Developing and Developed Countries? Evidence from Mexico City.” The Economic Journal 126 (591): 257-280. Publisher's VersionAbstract

Much of what we know about the marginal effect of pollution on infant mortality is derived from developed country data. However, given the lower levels of air pollution in developed countries, these estimates may not be externally valid to the developing country context if there is a nonlinear dose relationship between pollution and mortality or if the costs of avoidance behavior differs considerably between the two contexts. In this paper, we estimate the relationship between pollution and infant mortality using data from Mexico. We find that an increase of 1 parts per billion in carbon monoxide (CO) over the last week results in 0.0032 deaths per 100,000 births, while a 1 μg/m3 increase in particulate matter (PM10) results in 0.24 infant deaths per 100,000 births. Our estimates for PM10 tend to be similar (or even smaller) than the U.S. estimates, while our findings on CO tend to be larger than those derived from the U.S. context. We provide suggestive evidence that a non-linearity in the relationship between CO and health explains this difference.

does_the_effect_of_pollution.pdf
Hanna, Rema, Vivi Alatas, Abhijit Banerjee, Benjamin A. Olken, Ririn Purnamasari, and Matthew Wai-Poi. 2016. “Self-Targeting: Evidence from a Field Experiment in Indonesia.” The Journal of Political Economy 124 (2). Publisher's VersionAbstract
In this paper, we show that adding a small application cost to a social assistance program can substantially improve targeting because of the self-selection it induces. We conduct a randomized experiment within Indonesia’s Conditional Cash Transfer program that compares two of the most common methods of targeting welfare programs in the developing world: in one, beneficiaries first need to apply for the program, and then an enumerator visits them at home and determines their eligibility based on a proxy-means asset test; in the other, they are visited directly by the enumerator and automatically enrolled if they qualify based on the same proxy-means test. When applications were required, we find that the poor are more likely to apply than the rich, even conditional on whether they would pass the asset test. On net, the villages where applications were required have a much poorer group of beneficiaries than automatic enrollment villages. However, marginally increasing the cost of applying does not necessarily improve targeting: while experimentally increasing the distance to the application site reduces the number of applicants, it screens out both rich and poor in roughly equal proportions. Estimating our model of the enrollment choice suggests that our results are largely driven by the rich forecasting that they have a very small likelihood of passing the asset test, and so not bothering to apply, which in aggregate substantially improves targeting efficiency. The results suggest that the combination of the small cost and the final screening gives this class of mechanisms the ability to achieve many of the benefits of self-selection without imposing onerous ordeals on program beneficiaries.
self-targeting_evidence_from_a_field_experiment.pdf
Hanna, Rema, Esther Duflo, and Michael Greenstone. 2016. “Up in Smoke: The Influence of Household Behavior on the Long-Run Impact of Improved Cooking Stoves.” American Economic Journal: Economic Policy 8 (1): 80-114. Publisher's VersionAbstract

It is conventional wisdom that it is possible to reduce exposure to indoor air pollution, improve health outcomes, and decrease greenhouse gas emissions in rural areas of developing countries through the adoption of improved cooking stoves. This is largely supported by observational field studies and engineering or laboratory experiments. However, we provide new evidence, from a randomized control trial conducted in rural Orissa, India (one of the poorest places in India) on the benefits of a commonly used improved stove that laboratory tests showed to reduce indoor air pollution and require less fuel. We track households for up to four years after they received the stove. While we find a meaningful reduction in smoke inhalation in the first year, there is no effect over longer time horizons. We find no evidence of improvements in lung functioning or health and there is no change in fuel consumption (and presumably greenhouse gas emissions). The difference between the laboratory and field findings appears to result from households’ revealed low valuation of the stoves. Households failed to use the stoves regularly or appropriately, did not make the necessary investments to maintain them properly, and usage rates ultimately declined further over time. More broadly, this study underscores the need to test environmental and health technologies in real-world settings where behavior may temper impacts, and to test them over a long enough horizon to understand how this behavioral effect evolves over time.

hanna_upinsmoke_aej.pdf
2015
Hanna, Rema, and Paulina Oliva. 2015. “Moving Up the Energy Ladder: The Effect of a Permanent Increase in Assets on Fuel Consumption Choices in India.” American Economic Review 105 (5 (May 2015): 242-46. Publisher's VersionAbstract

Rising household wealth may potentially impact both total fuel consumption and fuel-type composition, resulting in significant health and environmental implications. Using data from a field experiment in India, we explore the effects of a transfer program that provided poor, rural households with greater levels of assets and cash. Total fuel consumption rose as a result of the transfers. Households shifted from using electricity rather than kerosene as their primary form of light, but total kerosene consumption also rose. In contrast, we did not observe a shift to cleaner cooking fuels.

moving_up_hanna.pdf
Hanna, Rema, Abhijit Banerjee, Gabriel Kreindler, and Benjamin A. Olken. 2015. “Debunking the Stereotype of the Lazy Welfare Recipient: Evidence from Cash Transfer Programs Worldwide”.Abstract

Targeted transfer programs for poor citizens have become increasingly common in the developing world. Yet, a common concern among policy makers - both in developing as well as developed countries - is that such programs tend to discourage work. We re-analyze the data from 7 randomized controlled trails of government-run cash transfer programs in six developing countries throughout the world, and find no systematic evidence that cash transfer programs discourage work.

Hanna: Debunking Labor Supply WP
Hanna, Rema, Sendhil Mullainathan, and Joshua Schwartstein. 2015. “Learning Through Noticing: Theory and Evidence from a Field Experiment.” The Quarterly Journal of Economics 129 (3): 1311-1353. Publisher's VersionAbstract

We consider a model of technological learning under which people “learn through noticing”: they choose which input dimensions to attend to and subsequently learn about from available data. Using this model, we show how people with a great deal of experience may persistently be off the production frontier because they fail to notice important features of the data they possess. We also develop predictions on when these learning failures are likely to occur, as well as on the types of interventions that can help people learn. We test the model’s predictions in a field experiment with seaweed farmers. The survey data reveal that these farmers do not attend to pod size, a particular input dimension. Experimental trials suggest that farmers are particularly far from optimizing this dimension. Furthermore, consistent with the model, we find that simply having access to the experimental data does not induce learning. Instead, behavioral changes occur only after the farmers are presented with summaries that highlight previously unattended-to relationships in the data.

R. Hanna in QJE: "Learning Through Noticing..."
Hanna, Rema, and Paulina Oliva. 2015. “The Effect of Pollution on Labor Supply: Evidence from a Natural Experiment in Mexico.” The Journal of Public Economics 122 (February 2015): 68-79. Publisher's VersionAbstract

Much of what we know about the marginal effect of pollution on infant mortality is derived from developed country data. However, given the lower levels of air pollution in developed countries, these estimates may not be externally valid to the developing country context if there is a nonlinear dose relationship between pollution and mortality or if the costs of avoidance behavior differs considerably between the two contexts. In this paper, we estimate the relationship between pollution and infant mortality using data from Mexico. We find that an increase of 1 parts per billion in carbon monoxide (CO) over the last week results in 0.0032 deaths per 100,000 births, while a 1 μg/m3 increase in particulate matter (PM10) results in 0.24 infant deaths per 100,000 births. Our estimates for PM10 tend to be similar (or even smaller) than the U.S. estimates, while our findings on CO tend to be larger than those derived from the U.S. context. We provide suggestive evidence that a non-linearity in the relationship between CO and health explains this difference.

R. Hanna in JPE on Effect of Pollution in Mexico, CID WP #225 (2011)
2014
Hanna, Rema, and Michael Greenstone. 2014. “Environmental Regulations, Air and Water Pollution, and Infant Mortality in India.” American Economic Review 104 (October 2014) (10): 3038-3072. Publisher's VersionAbstract

Using the most comprehensive developing country dataset ever compiled on air and water pollution and environmental regulations, the paper assesses India's environmental regulations with a difference-in-differences design. The air pollution regulations are associated with substantial improvements in air quality. The most successful air regulation resulted in a modest but statistically insignificant decline in infant mortality. In contrast, the water regulations had no measurable benefits. The available evidence leads us to cautiously conclude that higher demand for air quality prompted the effective enforcement of air pollution regulations, indicating that strong public support allows environmental regulations to succeed in weak institutional settings.

envl_regs_infant_mortality.pdf
Hanna, Rema, Vivi Alatas, Abhijit Banerjee, Benjamin Olken, Matthew Wai-Poi, and Ririn Purnamasari. 2014. Targeting the Poor: Evidence from a Field Experiment in Indonesia. 12th ed. Vol. Impact Evaluation Report. International Initiative for Impact Evaluation (3ie), Impact Evaluation Report, 12. Publisher's VersionAbstract

Governments of developing countries often lack verifiable income information for poor people and communities. This makes targeting for social programs a challenge. This report provides results from a randomised control trial that was designed to better understand how to improve targeting in Indonesia. Specifically, during the expansion of Indonesia’s real conditional cash transfer program, Program Keluarga Harapan (PKH), we randomized three different targeting methodologies — proxy means testing, self-targeting and community targeting – across 600 villages. We found that, when poverty is defined by consumption, self-targeting identifies poorer beneficiaries than proxy means testing and it has lower administrative costs. Community targeting is less effective than proxy means testing in identifying the poor based on per capita consumption, but it results in higher satisfaction levels with the program.

Hanna, Rema, and Shing-yi Wang. 2014. “Dishonesty and Selection into Public Service”.Abstract

In this paper, we demonstrate that university students who cheat on a simple task in a laboratory setting are more likely to state a preference for entering public service. Importantly, we also show that cheating on this task is predictive of corrupt behavior by real government workers, implying that this measure captures a meaningful propensity towards corruption. Students who demonstrate lower levels of prosocial preferences in the laboratory games are also more likely to prefer to enter the government, while outcomes on explicit, two-player games to measure cheating and attitudinal measures of corruption do not systematically predict job preferences. We find that a screening process that chooses the highest ability applicants would not alter the average propensity for corruption among the applicant pool. Our findings imply that differential selection into government may contribute, in part, to corruption. They also emphasize that screening characteristics other than ability may be useful in reducing corruption, but caution that more explicit measures may offer little predictive power.

rwp13-049_-_dishonesty_in_pub_serv.pdf
2013
Hanna, Rema, Vivi Alatas, Abhijit Banerjee, Benjamin A Olken, Ririn Purnamasari, and Matthew Wai-Poi. 2013. “Ordeal mechanism in targeting: theory and evidence from a field experiment in Indonesia”.Abstract

This paper explores whether ordeal mechanisms can improve the targeting of aid programs to the poor ("self-targeting"). We first show that theoretically the impact of increasing ordeals is ambiguous: for example, time spent applying imposes a higher monetary cost on the rich, but may impose a higher utility cost on the poor. We examine these issues by conducting a 400-village field experiment with Indonesia’s Conditional Cash Transfer program (PKH), where eligibility is determined through an asset test. Specifically, we compare targeting outcomes from self-targeting, where villagers came to a central site to apply and take the asset test, against the status quo, an automatic enrollment system among a pool of potential candidates that the village pre-identified. Within self-targeting villages, we find that the poor are more likely to apply, even conditional on whether they would pass the asset test. Exploiting the experimental variation, we find that self-targeting leads to a much poorer group of beneficiaries than the status quo. Selftargeting also outperforms a universal asset-based automatic enrollment system that we construct using our survey data. However, while experimentally increasing the distance to the application site reduces the number of applicants, it does not differentially improve targeting. Estimating our model structurally, we show that there are large unobserved shocks in the decision to apply, and therefore increasing waiting times to 9 hours or more would be required to induce detectable additional selection. In short, ordeal mechanisms can induce self-selection, but marginally increasing the ordeal can impose additional costs on applicants without necessarily improving targeting.

cid_working_paper_no._254_hanna_2012.pdf
Hanna, Rema, Vivi Alatas, Abhijit Banerjee, Benjamin A Olken, Ririn Purnamasari, and Matthew Wai-Poi. 2013. “Does Elite Capture Matter? Local Elites and Targeted Welfare Programs in Indonesia”.Abstract

This paper investigates the impact of elite capture on the allocation of targeted government welfare programs in Indonesia, using both a high-stakes field experiment that varied the extent of elite influence and non-experimental data on a variety of existing government transfer programs. Conditional on their consumption level, there is little evidence that village elites and their relatives are more likely to receive aid programs than non-elites. Looking more closely, however, we find that this overall result masks a difference between different types of elites: those holding formal leadership positions are more likely to receive benefits, while informal leaders are actually less likely to. We show that capture by formal elites occurs during the distribution of benefits under the programs, and not during the processes when the beneficiary lists are determined by the central government. However, while elite capture exists, the welfare losses it creates appear quite small: since formal elites and their relatives are only 9 percent richer than non-elites, are at most about 8 percentage points more likely to receive benefits than non-elites, and represent at most 15 percent of the population, eliminating elite capture entirely would improve the welfare gains from these programs by less than one percent.

cid_working_paper_no._255_hanna_2013.pdf
2012
Banerjee, Abhijit, Rema Hanna, and Sendhil Mullainathan. 2012. “Corruption.” The Handbook of Organizational Economics. Princeton University Press, 1109-1147. Publisher's VersionAbstract

In this paper, we provide a new framework for analyzing corruption in public bureaucracies. The standard way to model corruption is as an example of moral hazard, which then leads to a focus on better monitoring and stricter penalties with the eradication of corruption as the final goal. We propose an alternative approach which emphasizes why corruption arises in the first place. Corruption is modeled as a consequence of the interaction between the underlying task being performed by bureaucrat, the bureaucrat's private incentives and what the principal can observe and control. This allows us to study not just corruption but also other distortions that arise simultaneously with corruption, such as red-tape and ultimately, the quality and efficiency of the public services provided, and how these outcomes vary depending on the specific features of this task. We then review the growing empirical literature on corruption through this perspective and provide guidance for future empirical research.

corruption_20120409.pdf
Hanna, Rema, and Leigh L Linden. 2012. “Discrimination in grading.” American Economic Journal: Economic Policy 4 (4): 146-168. Publisher's VersionAbstract

We report the results of an experiment that was designed to test for discrimination in grading in India. We recruited teachers to grade exams. We randomly assigned child "characteristics" (age, gender, and caste) to the cover sheets of the exams to ensure that there is no relationship between these observed characteristics and the exam quality. We find that teachers give exams that are assigned to be lower caste scores that are about 0.03 to 0.08 standard deviations lower than those that are assigned to be high caste. The teachers' behavior appears consistent with statistical discrimination.

american_economic_journal_vol_4_no_4_hanna_2012.pdf
Duflo, Esther, Rema Hanna, and Stephen Ryan. 2012. “Incentives work: getting teachers to come to school.” American Economic Review 102 (4): 1241-1278. Publisher's VersionAbstract

We use a randomized experiment and a structural model to test whether monitoring and financial incentives can reduce teacher absence and increase learning in rural India. In treatment schools, teachers' attendance was monitored daily using cameras, and their salaries were made a nonlinear function of attendance. Absenteeism by teachers fell by 21 percentage points relative to the control group, and children's test scores increased by 0.17 standard deviations. We estimate a structural dynamic labor supply model and nd that teachers responded strongly to the nancial incentives, and that this alone can explain the dierence between the two groups. Our model is used to compute cost-minimizing compensation policies

american_economic_review_vol_102_no_4_hanna_2011_-_hks_incentives_work.pdf
Hanna, Rema, Vivi Alatas, Abhijit Banerjee, Arun G. Chandrasekhar, and Benjamin A. Olken. 2012. “Network Structure and the Aggregation of Information: Theory and Evidence from Indonesia”.Abstract

We use a unique data-set from Indonesia on what individuals know about the income distribution in their village to test theories such as Jackson and Rogers (2007) that link information aggregation in networks to the structure of the network. The observed patterns are consistent with a basic diffusion model: more central individuals are better informed and individuals are able to better evaluate the poverty status of those to whom they are more socially proximate. To understand what the theory predicts for cross-village patterns, we estimate a simple diffusion model using within-village variation, simulate network-level diffusion under this model for the over 600 different networks in our data, and use this simulated data to gauge what the simple diffusion model predicts for the cross-village relationship between information diffusion and network characteristics (e.g. clustering, density). The coefficients in these simulated regressions are generally consistent with relationships suggested in previous theoretical work, even though in our setting formal analytical predictions have not been derived. We then show that the qualitative predictions from the simulated model largely match the actual data in the sense that we obtain similar results both when the dependent variable is an empirical measure of the accuracy of a village’s aggregate information and when it is the simulation outcome. Finally, we consider a real-world application to community based targeting, where villagers chose which households should receive an anti-poverty program, and show that networks with better diffusive properties (as predicted by our model) differentially benefit from community based targeting policies.

cid_working_paper_no._246_hanna_2012.pdf
Alatas, Vivi, Abhijit Banerjee, Rema Hanna, Benjamin A. Olken, and Julia Tobias. 2012. “Targeting the Poor: Evidence from a Field Experiment in Indonesia.” American Economic Review 102 (4): 1206-1240. Publisher's VersionAbstract

This paper reports an experiment in 640 Indonesian villages on three approaches to target the poor: proxy-means tests (PMT), where assets are used to predict consumption; community targeting, where villagers rank everyone from richest to poorest; and a hybrid. Defining poverty based on PPP$2 per-capita consumption, community targeting and the hybrid perform somewhat worse in identifying the poor than PMT, though not by enough to significantly affect poverty outcomes for a typical program. Elite capture does not explain these results. Instead, communities appear to apply a different concept of poverty. Consistent with this finding, community targeting results in higher satisfaction.

american_economic_review_vol_102_no_4_hanna_2011_-_hks.pdf

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