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Efficiency and Gender Bias in Business Investment Decisions by Households: A Lab Experiment in Ghana
Last registered on January 25, 2018

Pre-Trial

Trial Information
General Information
Title
Efficiency and Gender Bias in Business Investment Decisions by Households: A Lab Experiment in Ghana
RCT ID
AEARCTR-0002679
Initial registration date
January 25, 2018
Last updated
January 25, 2018 4:01 PM EST
Location(s)
Region
Primary Investigator
Affiliation
The World Bank
Other Primary Investigator(s)
PI Affiliation
The World Bank
PI Affiliation
The World Bank
Additional Trial Information
Status
On going
Start date
2017-07-19
End date
2018-07-31
Secondary IDs
Abstract
We run a lab-in-the-field experiment in Ghana with female entrepreneurs and their partners, with the aim of studying efficiency and gender bias in investment allocation decisions by households. The couples play a series of voluntary contribution and modified dictator games. We introduce variations in who owns the business opportunity, whether the business opportunity is shared or private, whether communication is allowed, whether a common opportunity is framed as a traditionally "male" or traditionally "female" expense and whether participants are partnered with their spouse or a stranger.
External Link(s)
Registration Citation
Citation
Campos, Francisco, Elwyn Davies and Marine Gassier. 2018. "Efficiency and Gender Bias in Business Investment Decisions by Households: A Lab Experiment in Ghana." AEA RCT Registry. January 25. https://doi.org/10.1257/rct.2679-1.0.
Former Citation
Campos, Francisco, Elwyn Davies and Marine Gassier. 2018. "Efficiency and Gender Bias in Business Investment Decisions by Households: A Lab Experiment in Ghana." AEA RCT Registry. January 25. https://www.socialscienceregistry.org/trials/2679/history/25288.
Sponsors & Partners

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Experimental Details
Interventions
Intervention(s)
This lab-in-the field experiment has been designed with the goal of evaluating two related hypotheses: (i) limited cooperation within household is associated with loss of income and (ii) this limited cooperation is associated with gender biases in resource allocation, and as a result affects disproportionately the business opportunities controlled by women.

This project is motivated by findings from earlier studies which showed that cash grants had a positive effect on men-owned but not on women-owned businesses, while in-kind transfers have a positive effect on both men- and female-owned businesses (Fafchamps et al. 2014). Decision-making processes within the household that divert resources away from investing in women-owned businesses could explain this. The money is for example spent on the business of the husband: Bernhardt et al. (2017) show that women's enterprises receive less investment in a cash transfer program when their partner also runs a business, compared to women from households where she is the only business owner in the household. This behavior is not necessarily driven by gender biases: Bernhardt et al. show that in many cases the return to investment in the man's business are higher than investing in the woman’s business, partially due to differences in sectoral choice.

In our experiments, we control for differential returns to investment by experimentally varying whether the man or the woman owns a business with a profitable investment opportunity. This way we can identify gender-driven differences in investment behavior of couples and the extent this results in inefficiencies.

The existing literature provides a range of insights into the incomplete overlap of household members' preferences, and in the cost of limited cooperation when these preferences diverge. It shows that households' choices regarding resource allocation vary depending on the gender of the household member receiving (and controlling) different income streams (Duflo 2003, Duflo and Udry 2004). It also suggests that household make costly choices when the preferences of their members are far apart (Schaner 2015). This experiment builds upon these insights, observing variations in husbands and wives' decisions to invest in either shared or common opportunities, depending on who controls the returns associated with these opportunities.

Specifically, to test for the prevalence of gender biases in households' decisions over resource allocation, we implement a number of decision-making games with female entrepreneurs and their partners. In these games, participants face a tradeoff between keeping the money for themselves, investing this in a business opportunity owned by one of them or investing this in a shared opportunity (see Munro 2017 for an overview of experiments using this particular game).
Additional variations on these voluntary contribution mechanism (VCM) games are implemented to assess the additional effect of different playing conditions, including:

1. switching from private to joint decision making;
2. introducing the possibility the owners of the business opportunity can reallocate their earnings to their partners;
3. introducing two "business opportunities", one owned by the male partner, the other by the female partner, with different level of returns;
4. having participants play with a stranger rather than their spouse;
5. introducing joint ownership of the "common pot", this time framed as a "shared opportunity", with the earnings being split equally between the two players;
6. reframing this "shared opportunity" as an investment or expenses that is commonly viewed in the local context as primarily a male or female responsibility;
7. combining for one of the players the opportunity to invest in a "shared opportunity" with that of investing in a "business opportunity" that the player controls.

These games provide an opportunity to assess the extent of gender biases in the allocation of resources under different playing rules.
Intervention Start Date
2017-07-19
Intervention End Date
2017-08-31
Primary Outcomes
Primary Outcomes (end points)
The individual and joint investment choices (i.e., the number of tokens) made in the experimental game.
Primary Outcomes (explanation)
See the pre-analysis plan for further detail.
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
The couples play variants of the VCM game. In this game, both partners receive an endowment of 10 tokens (each worth 1 Ghana cedi), which they can either keep or invest in a business opportunity that is owned by one of the partners. The money in this opportunity gets multiplied by three and is subsequently given to the partner who owns the business opportunity. In most games, no re-allocation is possible.
Experimental Design Details
See the pre-analysis plan.
Randomization Method
Randomization by a computer on the experimental session level.
Randomization Unit
Experimental sessions (containing 4-11 couples).
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
98 sessions.
Sample size: planned number of observations
590 participants. A full breakdown is found in Table 2 of the pre-analysis plan.
Sample size (or number of clusters) by treatment arms
Depends on treatment, varying from 50 (for the stranger games) to more than 400 (for the private games).
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials

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IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
Innovations for Poverty Action IRB - USA
IRB Approval Date
2016-08-25
IRB Approval Number
13941 (00006083 - USA)
Analysis Plan

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Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
No
Is data collection complete?
Data Publication
Data Publication
Is public data available?
No
Program Files
Program Files
Reports and Papers
Preliminary Reports
Relevant Papers