The Impact of Microfinance on Pro-Social Behaviors: Experimental Evidence of Public Goods Contributions in Uganda
60 Pages Posted: 23 Feb 2016
Date Written: February 20, 2016
We ask whether access to microfinance loans by the poor has a spillover effect on their pro-social behaviors. An experimental field study in southern, Uganda is conducted using free riding in public goods contributions as an assessment. We document higher levels of contributions by those who have previously received a microloan. This effect cannot be explained by changes in social norms, income effects, or sample selection bias. The results suggest that exposure to microfinance promotes social preferences.
Keywords: experiment, field study, free riding, microfinance, public goods, social norms, social preferences, Uganda
JEL Classification: O16, J32, G20, C93, D63
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