Dangers of a Double-Bottom Line: A Poverty Targeting Experiment Misses Both Targets

20 Pages Posted: 7 Mar 2018 Last revised: 18 Dec 2019

See all articles by Dean Karlan

Dean Karlan

Northwestern University

Adam Osman

University of Illinois at Urbana-Champaign; Massachusetts Institute of Technology (MIT) - Abdul Latif Jameel Poverty Action Lab (J-PAL); Economic Research Forum (ERF)

Jonathan Zinman

Dartmouth College; Innovations for Poverty Action; Jameel Poverty Action Lab; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: March 1, 2018

Abstract

Two for-profit Philippine social enterprises, aiming to demonstrate corporate social responsibility by increasing microlending to the poor, incorporated a widely-used poverty measurement tool into their loan applications and tested the tool using randomized training content. Treated loan officers were instructed why and how to use the tool for targeting; control group training merely labeled the tool “additional household information.” The targeting training backfired, leading to no additional poor applicants and lower-performing loans. Descriptive evidence suggests the targeting training exacerbated loan officer misperceptions and multitasking problems. Our results help explain why corporate social responsibility efforts are often siloed from core operations.

Keywords: corporate social responsibility, double-bottom line, multi-tasking, social business, poverty targeting, discrimination, microfinance, microcredit

JEL Classification: D12, D22, D92, G21, O12, O16

Suggested Citation

Karlan, Dean and Osman, Adam and Zinman, Jonathan, Dangers of a Double-Bottom Line: A Poverty Targeting Experiment Misses Both Targets (March 1, 2018). Global Poverty Research Lab Working Paper No. 18-105. Available at SSRN: https://ssrn.com/abstract=3131197 or http://dx.doi.org/10.2139/ssrn.3131197

Dean Karlan (Contact Author)

Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Adam Osman

University of Illinois at Urbana-Champaign ( email )

601 E John St
Champaign, IL 61820
United States

Massachusetts Institute of Technology (MIT) - Abdul Latif Jameel Poverty Action Lab (J-PAL) ( email )

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Economic Research Forum (ERF) ( email )

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Jonathan Zinman

Dartmouth College ( email )

Hanover, NH 03755
United States
603-646-0075 (Phone)

HOME PAGE: http://https://sites.dartmouth.edu/jzinman/

Innovations for Poverty Action

1731 Connecticut Ave, 4th floor
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Jameel Poverty Action Lab

E60-246
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National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
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