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Conditional Cash Transfer and Loss Aversion in Education: Evidence from a Randomized Field Experiment in Bangladesh Presenter: Rohan Ray Co-authors: Tomoki Fujii, Christine Ho, Abu Shonchoy Abstract

Conditional cash transfers have been increasingly used over the last couple of decades to achieve desired economic and social outcomes. In this study, we make use of a randomized control trial to understand the effect of loss aversion in education in the context of conditional cash transfers for about 800 secondary school students in the rural district of Gaibandha in Bangladesh. Though loss aversion in education has been used in previous studies (Fryer et al. 2012), (Levitt et al. 2016), our study differs from the previous work in several dimensions. Firstly we provide incentives to the household rather than to the teacher or student. This is practical since in less developed economies, it is mostly the parents who invest in their children’s education. We also have long intervention periods with interruptions in be-tween, which allow us to test for habituation and dishabituation. Both the timing and amount of the reward are identical and delayed, which is arguably more realistic in actual policy decisions. Finally, we test the behaviour of individuals not just at the extensive margin, but also at the intensive margin by varying the amount of cash transfer.

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Conditional Cash Transfer and Loss Aversion in Education  

Conditional Cash Transfer and Loss Aversion in Education: Evidence from a Randomized Field Experiment in Bangladesh

Conditional Cash Transfer and Loss Aversion in Education  

Conditional Cash Transfer and Loss Aversion in Education: Evidence from a Randomized Field Experiment in Bangladesh