NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Joost de Laat

Porticus Foundation

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NBER Working Papers and Publications

September 2016Borrowing Requirements, Credit Access, and Adverse Selection: Evidence from Kenya
with William Jack, Michael Kremer, Tavneet Suri: w22686
We examine the potential of asset-collateralized loans in low-income country credit markets. When a Kenyan dairy cooperative exogenously replaced high down payments and joint liability requirements with loans collateralized by the asset itself - a large water tank- loan take-up increased from 2.4% to 41.9%. In contrast, substituting joint liability requirements for deposit requirements had no impact on loan take up. There were no repossessions among farmers allowed to collateralize 75% of their loans, and a 0.7% repossession rate among those offered 96% asset collateralization. A Karlan-Zinman test based on waiving borrowing requirements ex post finds evidence of adverse selection with very low deposit requirements, but not of moral hazard. A simple model and rough calibration suggests tha...
June 2016Cash for Carbon: A Randomized Controlled Trial of Payments for Ecosystem Services to Reduce Deforestation
with Seema Jayachandran, Eric F. Lambin, Charlotte Y. Stanton: w22378
This paper evaluates a Payments for Ecosystem Services (PES) program in western Uganda that offered forest-owning households cash payments if they conserved their forest. The program was implemented as a randomized trial in 121 villages, 60 of which received the program for two years. The PES program reduced deforestation and forest degradation: Tree cover, measured using high-resolution satellite imagery, declined by 2% to 5% in treatment villages compared to 7% to 10% in control villages during the study period. We find no evidence of shifting of tree-cutting to nearby land. We then use the estimated effect size and the "social cost of carbon" to value the delayed carbon dioxide emissions, and compare this benefit to the program's cost.

Published: Seema Jayachandran & Joost de Laat & Eric F. Lambin & Charlotte Y. Stanton & Robin Audy & Nancy E. Thomas, 2017. "Cash for carbon: A randomized trial of payments for ecosystem services to reduce deforestation," Science, vol 357(6348), pages 267-273.

 
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