Answer to Question #169360 in Economics for juan hinata

Question

You just got an internship with the Bill and Melinda Gates Foundation. Your boss, Nalina Canagarajah, has long been interested in microcredit programs and wants you to look at a specific case to examine the effects of microcredit programs. The Grameen Bank of Bangladesh is one of the best known and oldest microcredit providers and the data set Ms Canagarajah has provided you contains information about Grameen microcredit programs, participation, and household outcomes. The Grameen bank separates its programs into those for men and those for women. Some villages have no programs, some have only for men, some only for women, and some have both. Furthermore, only households with less than 50 decimals of land, equal to 0.5 acre, are officially eligible to participate in microcredit programs (the “target group”).

The outcome Ms Canagarajah is particularly interested in is household per capita expenditure (measured in Taka) because that captures whether microcredit can help households escape poverty. She wants you to examine the following major questions:

1. What is the effect of having a male-only microcredit program in the village?
2. What is the effect of having a female-only microcredit program in the village?
3. What is the effect of having a female from the household participate?
4. What is the effect of having a male from the household participate?

Before you can do these analyses, you have to set up a model that can explain per capita consumption level of a household. It is standard in the literature to use log of per capita expenditure/consumption as the dependent variable. When deciding on variables think about which variables either have an impact on consumption/income levels or might capture differences between different villages. Make sure you do not include variables that do not belong, such as other expenditure measures.

Data

The data are provided in a R data file. . The data are a subset of the Bangladesh Household Survey 1998/1999, conducted jointly by the Bangladesh Institute of Development Studies and the World Bank. Information was

Memorandum

Write a brief (500 words or less) summary of your findings in standard memorandum format for Ms Canagarajah based on your analysis. Ms Canagarajah is not interested in the statistical analysis, she just wants to know the results and your interpretation of them, so that the Foundation can use them when deciding on their future plans. You will need to interpret and write up the results in a form that will make sense to her; she is not a statistician. The memorandum should NOT contain technical jargon. You must include a clearly labeled and explained table(s) and/or graph(s) to highlight relevant points about the data and statistical analysis. A great choice is histograms of the most relevant results. Do not just copy the R output into the memorandum.

Statistical Analysis (Appendix)

The statistical analysis will be used for internal discussions of where future funding should be directed. Since you are only on a short internship, you will be gone when the decisions are made. Ms Canagarajah or any other employees involved in the discussions will therefore not be able to ask you what you did in the analyses and why. As such, it is imperative that your statistical analysis be clearly and completely documented. You must describe each step you take and why. Make sure you cover the base model before answering the questions. Methods and results of the analyses you do should be clearly explained and labeled in the appendix. Do NOT include the raw data.

Answer 1

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