Pathways Less Explored – Aspirations, Locus of Control, and Agricultural Transformation

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Pathways Less Explored – Aspirations, Locus of Control,
and Agricultural Transformation
Alemayehu Seyoum Taffesse (IFPRI),
Fanaye Tadesse (IFPRI)
14th International Conference on the Ethiopian Economy
Ethiopian Economics Association (EEA)
July 21 – 23, 2016
EEA Compound, Addis Ababa, Ethiopia

2.  Motivation
 State of Ethiopian Agriculture (no statistics)
 Pathways less explored – psychological and social influence
that can complement, accelerate
 Conceptual issues
 Two concepts – Aspirations, Locus of control
 A schema
 Applications to Ethiopia
 LOC and adoption of modern farm inputs;
 Summary of work on aspirations
 Observations – so what?
Outline
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3. Motivation – State of Agriculture
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 Summary – Outcome state
 low and but growing productivity,
 Summary – Conditioning states
 limited capital stock (physical, human, infrastructural, natural),
 weak institutions (imperfect markets, agencies of public service delivery,
early-warning and emergency assistance systems);
 exposure to shocks (natural, market, political);
 Policy Instruments
 public investment (research and extension services, education, health,
infrastructure);
 reforms – effective policy making process, land reform, public sector
reform, incentives (taxes and subsidies, interest rates, regulation);
Question: Are there complementary pathways not yet used?

4. Motivation – why do poor people underinvest?
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 Underinvestment by the poor – a source of persistence in low
productivity, poverty, and inequality
 Focus 1 - ‘external circumstances’ and ‘opportunities’.
Low returns to investments; Unexploited opportunities due to lack of
information or knowledge; Social constraints;
 Conceptual – ‘opportunities’
 Focus 2 - constraints associated with the manifested attributes of
decision makers
 Identity issues: sense of self;
 Psychological issues: impatience, commitment, and psychological
barriers
 Aspirations failure

5. Conceptual Issues – Two Concepts
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 Aspirations (Lewin, Simon, Appadurai, Ray, Bernard et al):
 are goals or preferred boundary-states with respect to a relevant
domain of choice (future-oriented);
 differ from expectations – preferences vs. beliefs;
 important for analysing and/or addressing behaviour – motivators,
heterogeneous, context-dependent and changing;
 Locus of Control (Bandura, Rotter, Levenson, Hill):
 a person’s belief regarding the primary causation of events in his or
her life in general or in a specific area;
 ‘internal’ vs. ‘external’;
 deemed a powerful influence on personality and behaviour;
 used to predict behaviour in a lot of spheres (health, education,
employment …)

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Premise – Poorer households use less modern inputs
 Low productivity and poverty
persist;
.3.4.5.6.7
1 2 3 4 5
5 quantiles of wealth_index
95% CI predicted fert_use
.1
.15
.2
.25
.3
.35
1 2 3 4 5
5 quantiles of wealth_index
95% CI predicted improved_seed
36% - Fertilizers
121% - Improved Seeds
Chemical fertilizers and
improved seeds = 20% of
crop yield growth during
2005-2013 in Ethiopia
(Bachewe et al. (2015))

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Premise – LOC a possible pathway
Measuring LOC: Binary
Survey
LOC-
Destiny (%)
Number of
Observations
Ethiopia - PSNP 2008 25.8 4,360
Ethiopia - ERHS 2009 30.9 2,068
Ethiopia - PSNP 2010 32.3 4,619
Ethiopia - Aspirations Survey 2010-11 37.7 2,068
Ethiopia – AGP Baseline Survey 2011 35.3 7,896
Ethiopia - FTF Baseline Survey 2013 30.3 6903
Ethiopia – Transport Survey 2014 31.4 775
“Each person is primarily responsible for his/her success or failure in life.”
“A person’s success or failure in life is a matter of his/her destiny.”

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Premise – LOC a possible pathway
Locus of control – pared down version of Levenson (1981)
C To a great extent my life is controlled by accidental/chance happenings.
O I feel like what happens in my life is mostly determined by powerful people.
I When I make plans, I am almost certain/guaranteed/sure to make them work.
C Often there is no chance of protecting my personal interests from bad luck happenings.
C When I get what I want, it’s usually/mostly because I’m lucky.
C My experience in my life has been that what is going to happen will happen.
O My life is chiefly controlled by other powerful people.
O
People like myself have very little chance of protecting our personal interests when they
conflict with those of more powerful people.
C
It’s not always wise for me to plan too far ahead because many things turn out to be a matter
of good or bad fortune.
O
Getting what I want requires making those people above me (people with higher status)
happy with me.
I I can mostly determine what will happen in my life.
I
I am usually able to protect my personal interests (I can usually look after what is important to
me)
I When I get what I want, it’s usually because I worked hard for it.
O
In order to have my plans work, I make sure that they fit in with the desires of people who
have power over me.
I My life is determined by my own actions.
Measuring LOC: Four-level (Likert-type) semantic scale (Strongly disagree,
Disagree, Agree, Strongly agree)

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Results – LOC and Wealth
7
7.5
8
8.5
9
1 2 3 4 5
5 quantiles of wealth_index
95% CI predicted LOC_others
11.5
12
12.5
13
13.5
14
1 2 3 4 5
5 quantiles of wealth_index
95% CI predicted LOC_internal
8.28.48.68.8
9
9.2
1 2 3 4 5
5 quantiles of wealth_index
95% CI predicted LOC_chance
 Poorer individuals have
lower (higher) internal
(external) locus of control (7-
17%);
 Also holds for the AGP and
Transport Surveys;
7
7.5
8
8.5
9
1 2 3 4 5
5 quantiles of wealth_index
95% CI predicted LOC_others
11.5
12
12.5
13
13.5
14
1 2 3 4 5
5 quantiles of wealth_index
95% CI predicted LOC_internal

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Results – LOC and Wealth
LOC-
Internal
LOC-
Chance
LOC-
Others
Gender (Male=1)
0.353*** -0.324*** -0.424***
(0.128) (0.125) (0.133)
Age (Years)
0.007 0.004 -0.012
(0.020) (0.021) (0.021)
Schooling (Years)
0.068*** -0.004 -0.03
(0.024) (0.024) (0.023)
Wealth Quintile
0.183*** -0.136*** -0.185***
(0.065) (0.041) (0.043)
Constant
12.246*** 8.956*** 8.757***
(0.480) (0.512) (0.532)
Number of Observations 5925 5925 5925
The LOC-Wealth relations hold after controlling for age, gender, and
schooling of the respondent

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Results – LOC and Aspirations
Item Overall Aspiration
Gender (Female=1)
-0.159
(0.000)***
Age (years)
0.003
(0.088)*
Age Squared (years)
-0.00
(0.020)**
Highest grade of schooling completed
0.132
(0.000)***
Wealth
0.013
(0.608)
Locus of control - Chance
0.034
(0.152)
Locus of control - Powerful Others
-0.004
(0.907)
Locus of control - Internal
0.106
(0.000)***
Constant
-0.486
(0.001)***
N 1631
Villages 63
F( 8, 55) = 32.20 0

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Hypothesis – LOC and Poverty
 Poorer individuals have lower internal (higher external) locus of
control;
 A feedback loop linking LOC and poverty?
 Poverty lowers internal LOC, but is not a complete determinant;
 Weak internal (or strong external) LOC discourages ‘investment’ by
the poor;
 Poverty persists …
 Explore the hypothesis in relation to adoption of modern inputs by
farmers in rural Ethiopia
 Three surveys – AGP (2011), FTF (2013), Transport (2014)

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Specification – Modern Input Use
Specification - Probit (Multivariate Probit) regression of fertilizer use,
improved seed use:
Controls:
 Respondent’s sex, age, schooling, LOC scores;
 Household wealth;
 Number of working-age male members in the household,
 Household landholding (hectares),
 Soil fertility,
 Slope of plot,
 Access to extension services (yes=1),
 Land certification,
 Average distance of parcels from the homestead (minutes),
 Distance to a permanent market (km),
 Fraction of landholding cultivated with cereals,
 Off-farm and/or non-farm income (yes=1),
 Access to credit (yes=1), rainfall (mm in logs)

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Results – LOC and Modern Input Use
Marginal Effects
(FTF Survey (2013))
Fertilizer use Improved seed
Locus of Control - Chance
-0.012*** 0.000
(0.003) (0.002)
Locus of Control - Internal
0.003 0.003
(0.003) (0.002)
Gender of Household Head (Male=1)
-0.014 -0.032*
(0.019) (0.016)
Age of Household Head (Years)
-0.001 -0.003
(0.003) (0.002)
Schooling of Household Head (Years)
0.009** -0.001
(0.003) (0.003)
Wealth Quintile
0.043*** 0.035***
(0.009) (0.007)
Number of Observations 5639 5639
Wald test 311.04 124.89
P-values 0.000 0.000

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Results – LOC and Modern Input Use
Marginal Effects
(AGP Survey (2011))
Fertilizer use
Improved
seed
Locus of Control - Chance
-0.001 0.000
(0.003) (0.002)
Locus of Control - Internal
0.002 0.001
(0.003) (0.002)
Gender of Household Head (Male=1)
0.075*** 0.039***
(0.017) (0.012)
Age of Household Head (Years)
0.010*** 0.005**
(0.002) (0.002)
Schooling of Household Head (Years)
0.012*** 0.006**
(0.004) (0.002)
Wealth Quintile
0.011 -0.003
(0.007) (0.005)
Number of Observations 7445 7424
Wald test 414.64 250.61
P-values 0.000 0.000

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Results – LOC and Modern Input Use
Marginal Effects
(Transport Survey (2014)
Fertilizer use
Improved
seed
Locus of Control - Chance
-0.002 -0.002
(0.003) (0.004)
Locus of Control - Internal
0.007** 0.012*
(0.003) (0.006)
Gender of Household Head (Male=1)
0.230** 0.083*
(0.093) (0.049)
Age of Household Head (Years)
0.002 0.009
(0.005) (0.010)
Schooling of Household Head (Years)
-0.008 -0.019
(0.010) (0.018)
Wealth Quintile
0.028*** 0.042***
(0.006) (0.016)
Number of Observations 776 776
Wald test 519.38 160.34
P-values 0.000 0.000

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Summary
 Internal locus of control correlates with higher likelihood of
adopting modern inputs (chemical fertilizers and improved
seeds), while chance locus of control is linked with lower
likelihood.
 The size of the correlation is comparable to that with
schooling.
 Heterogeneity of circumstances matter for the association;
 remoteness (Road Survey),
 access to extension services (AGP Survey), …

18. Summary – Bernard et al. (2015b)
 Results (based on ERHS, Insurance panels)
 Poorer individuals have on average lower aspirations;
 Results persist across specifications;
 Panel data used, but happy to consider them as correlations;
 Issues
 Measurement – revealed vs. declared – develop an instrument
 Identification – correlations vs. causal links (poverty–low
aspirations) – field experiment
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19.  Do people’s aspirations affect whether they invest?
 Randomly assign Ethiopian farmers to watch videos about the lives of
four role models.
 Treatment = one hour of documentaries.
 No other intervention.
 Very good balance at baseline across groups.
 Key findings:
 Improvements in aspirations after screening and after six months.
 Changes in related psychosocial characteristics (LoC), but not risk
aversion or time preferences.
 Small improvements in savings, credit, demand for credit, children’s
school enrolment and spending on schooling 6 months after
screening.
 Repeat survey coming up, production-side data to be collected.
,
Summary – Bernard et al. (2015a)
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Observations
So what? Any policy implications? [WDR (2015)]
 Ascertain the nature and extent of “psychological and social
influences” that affect behaviour – “desirable, possible,
‘thinkable’”;
 Relevance to policy design (complementary to incentives):
 Focus both on ‘what’ and ‘how” – timing, labelling, simplifying,
reminding;
 Understand target communities – norms, identity;
 Examples form the suggestive evidence above:
 Poor vs. non-poor – same delivery modality may not work;
 Male vs. female – additional reason to enhance women
empowerment in agriculture;
Motivational devices, Role models
A lot to be learnt – more research and experimentation

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Thank you

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Conceptual Issues – A Schema
Preferences -
Aspirations
Aspirations
gap
Preferences -
Others
Experience
(personal,
collective;
including
shocks)
Figure 1: Conceptual Schema
Beliefs (locus of
control, self-
efficacy,
expectations. ...)
Behaviour
or actions
Environment
(economic,
cultural, natural,
institutional, …)