Valuing the Time of the Self-Employed

Last registered on June 28, 2023
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Pre-Trial

Trial Information

General Information

Title
Valuing the Time of the Self-Employed
RCT ID
AEARCTR-0004110
Initial registration date
April 18, 2019

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
April 22, 2019, 12:05 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
June 28, 2023, 1:45 PM EDT

Last updated is the most recent time when changes to the trial's registration were published.

Locations

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Primary Investigator

Name
Travis Baseler
Affiliation
University of Rochester
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Other Primary Investigator(s)

PI Name
Pascaline Dupas
PI Affiliation
Stanford University
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PI Name
Erik Snowberg
PI Affiliation
University of Utah and University of British Columbia
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PI Name
Daniel Agness
PI Affiliation
University of California Berkeley
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PI Name
Sylvain Chassang
PI Affiliation
Princeton University
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Additional Trial Information

Status
On going
Start date
2019-04-23
End date
2024-07-31
Keywords
Agriculture, Labor, Welfare
Additional Keywords
value of time, non-transitivity, labor rationing, self-serving bias
JEL code(s)
C93, D03, D61, D91, J22, O12, Q12
Secondary IDs
Prior work
This trial is based on or builds upon one or more prior RCTs.
Abstract
People's value for their own time is a key input in public policy evaluations---these should account for time taken away from work or leisure as a result of policy. Using rich choice data collected from farming households in western Kenya, we show that households exhibit non-transitive preferences. As a result, neither market wages nor standard valuation techniques correctly measure participants' value of time. Using a structural model, we identify the behavioral wedges in participants' choices, and find that distortions appear when households exchange cash either for time or for goods. Our model estimates suggest that valuing the time of the self-employed at 60% of the market wage is a reasonable rule of thumb.
External Link(s)

Registration Citation

Citation
Agness, Daniel et al. 2023. "Valuing the Time of the Self-Employed." AEA RCT Registry. June 28. https://doi.org/10.1257/rct.4110-2.0
Former Citation
Agness, Daniel et al. 2023. "Valuing the Time of the Self-Employed." AEA RCT Registry. June 28. https://www.socialscienceregistry.org/trials/4110/history/184414
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
This study is not a randomized trial, and there are no interventions. We use a lab-in-the-field design to elicit farmers' willingness to pay across several numeraires. We randomly assigned which numeraire farmers would pay in in order to adhere to our elicitation protocol (which told farmers that their payment would be randomly chosen), but our main analysis does not exploit this random variation.

Each farmer in our sample was given three choices that used the BDM design of Becker (1964), as implemented in Berry et al. (2020). Participants were asked to state their preferences for some object, for example a lottery ticket for a pump, in some unit of payment, for example, hours of labor. After stating their preferences, a random price was drawn, and if their stated value was higher than the price, that is what they paid for the object. If their value was lower than the price, no transaction occurred.

Choice RW (Reservation Wage): We explained to each farmer that we were offering one-time, 2-hour jobs performing casual agricultural labor in a different village. We asked each farmer whether they would be willing to accept the job at 120 KSh per hour. If they answered "no,'' we asked about their reservation wage directly. If they answered "yes,'' we asked whether they would accept the job at incrementally lower wages until they changed their answer to ``no.''

Choice CB (Cash Bid): We explained to each farmer that we were selling lottery tickets offering 1-in-10 odds of winning a MoneyMaker pump. We collected willingness to pay in cash by asking the farmer whether they would be willing to pay a low price of 20 KSh, and then asking the same question for increasingly higher prices, until the farmer declined the offer.

Choice TB (Time Bid): As in Choice CB, we explained to each farmer that we were offering lottery tickets with 1-in-10 odds of winning a MoneyMaker pump. We collected willingness to pay in time by asking the farmer whether they would be willing to work 30 minutes for the ticket, and then asking the same question for increasingly higher amounts of time, until the farmer declined the offer.
Intervention Start Date
2019-04-23
Intervention End Date
2019-06-23

Primary Outcomes

Primary Outcomes (end points)
Respondents' value of time, reservation wage, and predicted market wage.
Primary Outcomes (explanation)
We measure the value of time using three approaches. The first uses the respondent's choice in Choice RW directly (we call this the Direct Value of Time). The second uses the ratio of Choice CB to Choice TB (we call this the Indirect Value of Time). The third, the Structural Value of Time, is estimated structurally as described in the paper. Market wages are measured for casual laborers and predicted for those who did not recently perform casual labor.

Secondary Outcomes

Secondary Outcomes (end points)
Emotional responses relating to accepting and offering low wages.
Secondary Outcomes (explanation)
Measured as self-reported emotional response to vignettes related to accepting and offering low wages.

Experimental Design

Experimental Design
We selected 18 villages for our sample from a set of villages sampled for a separate project which auctioned off Kickstart irrigation pumps. We selected all control villages that had not received any pumps, and used remaining pumps from that project to elicit willingness to pay in cash and time.

Each village was randomly assigned (by a pseudo-random number generator) to one of three groups: Cash, Cash + Day Work, or Task. Farmers in Cash villages received a lottery ticket price payable in cash only, and were not eligible for wage work. Farmers in Cash + Day Work villages received a lottery ticket price payable in cash only, and were eligible for wage work. Farmers in Task villages received a lottery ticket price payable in hours of work only, and were not eligible for day work.

Our main analysis does not exploit this random variation.
Experimental Design Details
Not available
Randomization Method
Randomization done in office by a computer.
Randomization Unit
Village.
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
18 villages
Sample size: planned number of observations
332 farmers
Sample size (or number of clusters) by treatment arms
Our study does not have treatment arms. We assigned which numeraire farmers would pay in as follows: 8 to Cash, 4 to Cash + Day Work, 6 to Task.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Innovations for Poverty Action Institutional Review Board
IRB Approval Date
2019-03-15
IRB Approval Number
2644
Analysis Plan

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