Prosocial Market Behavior and Child Vendors in Street Markets*  

Documents:  Older Version [new draft coming soon!],  Ethics Appendix          

Coverage: Ideas for India,  IGC,  Marginal Revolution

*Previously circulated as Entrepreneurs of Emotions: Evidence from Street Vending in India    

Street vending is a ubiquitous feature of urban life and often involves children in developing countries. I examine how prosocial motives shape demand and supply-side behavior in these informal markets, combining observational, survey, and experimental data from Delhi, India. Partnering with vendors to randomize prices and the passersby they approach, I find that even when selling identical goods, child vendors are twice as likely to make a sale. Although buyers’ valuations do not differ, women and couples are more likely to purchase than men, and they are targeted more often and quoted higher prices. These patterns align with a model in which buyers derive utility from altruism and face a cost of refusal. Supporting the model, purchase requests double sales, and passersby display greater altruism toward children in an incentivized dictator game. Survey evidence further reveals that vendors target women and couples because they are perceived to find it harder to refuse. These findings demonstrate how prosocial preferences can shape market outcomes in ways that favor vulnerable groups and how sellers strategically exploit these insights to influence exchange.

We study the impact of mobile internet expansion on student outcomes by exploiting the staggered global rollout of 3G between 2000 and 2018. We link geospatial data on 3G coverage to 2.5 million test scores from 82 countries and find that access to 3G substantially increased smartphone ownership and internet use among adolescents, yet reduced test scores in math, reading, and science by the equivalent of one-quarter of a year of learning. Negative effects are driven by exposure during adolescence and are concentrated among lower-achieving students. Mechanisms include increased passive online activities, reduced study efficiency, and weaker social connectedness.

Inaccurate beliefs about social norms can reduce useful social interactions and adversely affect an individual’s ability to deal with negative shocks. We implement a randomized controlled trial with low-income workers in urban India who lack access to formal financial and healthcare support. We find that the majority of individuals underestimate their community’s willingness to engage in dialogue around financial and mental health concerns. Belief correction leads to a large increase in the demand for network-based assistance. We show that the effects are driven by a reduction in the perceived costs of violating social norms arising due to concerns around reputation and insensitivity. We structurally estimate a network diffusion model and predict that our belief correction intervention will not lead to a shift in equilibrium engagement. Consistent with this, 2 years later, we find that the average beliefs of those exposed to the intervention are significantly more optimistic but still lower than the information delivered in the experiment. We compute the strength of counterfactual interventions needed to generate a sustained effect and find that belief correction can be used to generate both the demand and funding for such policies.

We study how teacher expectations affect academic performance by randomizing whether students (a) receive expectations framed as attainable or ambitious, (b) are additionally paired with a classmate, (c) receive past performance information, or (d) receive no message. Expectations increase math scores by 0.21σ, particularly for those receiving ambitious goals or predicted to perform poorly. Information has comparable effects (0.18σ), especially in low-literacy settings. Pairing only helps when students are similar. Students with large gaps between expectations and baseline performance show sustained gains 12–18 months later. Findings highlight teacher-student communication as an effective input in the education production function

We conduct a randomized experiment in 225 low-cost primary schools in Kenya using non-monetary incentives (certificates and badges) based on performance in Math and English. We randomize over 20,000 students to receive either individual-level, class-level, combined or no incentives. We find that class-level incentives raised test scores by 0.1-0.2 standard deviations (including on non-incentivized subjects), and student and teacher attendance by 14.5% and 6% respectively. Combined incentives are also effective in raising student performance. The effect of individual-level incentives on test scores is statistically indistinguishable from zero.