1. 6/3/20141 Credit Policy and Household Level Data Kinnon Scott DECRG World Bank Data on Access of Poor and Low Income People to Financial Services

2. 6/3/20142 Why Credit? l Gains »Inter-temporal Trade »For Households –Productivity –Consumption Smoothing l Market Imperfections »Imperfect Information »Contracts/Legal Structure l Government Interventions »Contradictory Results

3. 6/3/20143 Why Household Surveys? l Description of Credit Markets »Sources of Credit »Types of Credit »Universe of Lenders »Use of credit by type, size l Testing for Imperfections »Number of Lenders »Power Relationships »Knowledge »Interest Rates »Liquidity Constraints

4. 6/3/20144 Why Household Surveys? l Link to welfare levels l Link to other household and individual characteristics l Details on informal provision of credit l Use of credit for household businesses / informal sector businesses

5. 6/3/20145 What type of Household Survey? l Detail l Depth l Control l Loss of detail l Lower costs l Sustainability l Breadth- linkages to key characteristics and welfare Specialized Financial Survey Add to Existing Survey

6. 6/3/20146 Which Household Survey? l Labor force survey (LFS) l Demographic and Health Surveys (DHS) l Multiple Indicator Cluster Surveys (MICs) l Household Budget or Income and Expenditure Surveys (HBS/IES) l Living Standards Measurement Study Surveys (LSMS)

7. 6/3/20147 Which Household Survey? Detailed Inform- ation Measure Welfare Link to other charact. Provide Sources Quality- Direct Informant FINAN. Advantages: Depth, detail, control Disadvantage: Cost, limited ability to link to other characteristics, limited ability to measure welfare (impact) need prior survey for welfare measurement

8. 6/3/20148 Which Household Survey? Detailed Inform- ation Measure Welfare Link to other charact. Provide Sources Quality- Direct Informant FINAN. Uni- topic * *For example: LFS, DHS Disadvantage: Very specific focus- hard to add new topics, often very short questionnaires Advantage: Large samples, frequency

9. 6/3/20149 Which Household Survey? Detailed Inform- ation Measure Welfare Link to other charact. Provide Sources Quality- Direct Informant FINAN. LFS HBS Advantage: Often can measure welfare, can be detailed, have (limited) other characteristics Disadvantage: Welfare tricky, long, high refusal rates

10. 6/3/201410 Measuring Welfare in HBS l Scott, Kinnon. (2003) Generating Relevant Household Level Data: Multi-topic Household Surveys in F. Bourguinon and Luiz A., Pereira da Silva eds.,The Impact of Economic Policies on Poverty and Income Distribution: Evaluation Techniques and Tools, Washington D.C.: Oxford University Press. l Olson-Lanjouw, Jean and Peter Lanjouw, 2001. How to Compare Apples and Oranges: Poverty Measurement Based on Different Definitions of Consumption, Review of Income and Wealth, Series 47, Number 1, March 2001: pp. 25-42.

11. 6/3/201411 Which Household Survey? Detailed Inform- ation Measure Welfare Link to other charact. Provide Sources Quality- Direct Informant FINAN. LFS HBS/IES Advantage: Often can measure welfare, can be detailed, have (limited) other characteristics Disadvantage: Welfare tricky, long, less depth, high refusal rates, one respondent

12. 6/3/201412 Which Household Survey? Detailed Inform- ation Measure Welfare Link to other charact. Provide Sources Quality- Direct Informant FINAN. Uni-topic HBS LSMS Advantage: Measures welfare, characteristics, household businesses, quality Disadvantage: Small sample, less depth on credit issues

13. 6/3/201413 Selected References on LSMS l LSMS Web Site: http:/www.worldbank.org/lsms l Scott, Kinnon, Diane Steele, Tilahun Temesgen (forthcoming). Living Standard Measurement Study Surveys in U.N. Technical Report Statistics Division, United Nations, New York. l Grosh, Margaret and Paul Glewwe (2000). Designing Household Survey Questionnaires for Developing Countries: Lessons from 15 years of the Living Standards Measurement Study. World Bank, Washington, D.C. l Grosh, Margaret and Juan Munoz (1996), A Manual for Planning and Implementing the Living Standards Measurement Study Surveys LSMS Working Paper, No. 126.

14. 6/3/201414 Having your cake and eating it l Do a sub-sample of a national, multi- topic survey for in-depth financial survey »Specialized team »Identify respondents l Piggy-back on end of survey l Use determinants of poverty from previous poverty survey

15. 6/3/201415 Key Measurement Issues l Individual l Exhaustive coverage of sources and types of credit l Access to credit: physical vs perceived l Collateral ownership l Total cost of credit l Panel

16. 6/3/201416 Modules in an LSMS l Demographics l Housing, utilities l Education l Health l Migration l Credit l Labor l Fertility l Agriculture l Non-Agricultural Businesses l Consumption l Other Income Hhld l Anthropometrics

17. 6/3/201417 Credit Module l Demographics l Housing, utilities l Education l Health l Migration l Credit l Labor l Fertility l Agriculture l Non-Agricultural Businesses l Consumption l Other Income Hhld l Anthropometrics

18. 6/3/201418 Credit Module l Demographics l Housing, utilities l Education l Health l Migration l Credit l Labor l Fertility l Agriculture l Non-Agricultural Businesses l Consumption l Other Income Hhld l Anthropometrics

19. 6/3/201419 Further information l Scott, Kinnon (2000). Credit in Margaret Grosh and Paul Glewwe, eds., Designing Household Survey Questionnaires for Developing Countries: Lessons from 15 years of the Living Standards Measurement Study. World Bank, Washington, D.C.

20. 6/3/201420 Complementarities l Household Level Data: »Identify universe of lenders lender surveys »Identify household enterprises enterprise surveys l Enterprise level data: l Lender level data »Identify costs and criteria household level enterprise level l Legal System all l Other Studies: Qualitative, anthropology, sociology »Improve quality of data collection all levels, validation