Intervention-Driven Changes in Social Networks and their Eff ects on Household Outcomes

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 25.02.2014, 12:15 - 13:30


Presentation by 

Margherita Comola (Paris School of Economics)


We study how social networks change as a result of an exogenous expansion in formal financial access and show how to estimate the effects of these changes on household outcomes. We use a unique household panel dataset that contains detailed information on the network of informal financial transactions before and after a field experiment that randomized access to savings accounts in Nepal. First, we provide evidence that the exogenous intervention a effected the network of informal financial transactions. Second, we propose a dynamic model of peer effects in household expenditure that accounts for changes in the network due to the intervention. We show that disregarding such changes would lead to downward-biased peer-effect estimates.

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