Changing Households' Investment Behaviour through Social Interactions with Local Leaders: Evidence from a Randomised Transfer Programme

Abstract

This article analyses the role of interactions with local leaders in amplifying poor households' investment response to a social programme. The causal effect of social interactions is identified through the randomised assignment of leaders and other beneficiaries to three different interventions aimed at increasing human capital and productive investments. Social interactions are found to augment programme impacts on households' investments in education, nutrition and income‐generating activities and to affect households' attitudes towards the future.

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