[go: up one dir, main page]
More Web Proxy on the site http://driver.im/
IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/8770.html
   My bibliography  Save this paper

The Diffusion of Microfinance

Author

Listed:
  • Banerjee, Abhijit
  • Jackson, Matthew O.
  • Duflo, Esther
  • Chandrasekhar, Arun G.
Abstract
We examine how participation in a microfinance program diffuses through social networks. We collected detailed demographic and social network data in 43 villages in South India before microfinance was introduced in those villages and then tracked eventual participation. We exploit exogenous variation in the importance (in a network sense) of the people who were first informed about the program, "the injection points". Microfinance participation is higher when the injection points have higher eigenvector centrality. We estimate structural models of diffusion that allow us to (i) determine the relative roles of basic information transmission versus other forms of peer influence, and (ii) distinguish information passing by participants and non-participants. We find that participants are significantly more likely to pass information on to friends and acquaintances than informed non-participants, but that information passing by non-participants is still substantial and significant, accounting for roughly a third of informedness and participation. We also find that, conditioned on being informed, an individual's decision is not significantly affected by the participation of her acquaintances.

Suggested Citation

  • Banerjee, Abhijit & Jackson, Matthew O. & Duflo, Esther & Chandrasekhar, Arun G., 2012. "The Diffusion of Microfinance," CEPR Discussion Papers 8770, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:8770
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP8770
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Coralio Ballester & Antoni Calvó-Armengol & Yves Zenou, 2006. "Who's Who in Networks. Wanted: The Key Player," Econometrica, Econometric Society, vol. 74(5), pages 1403-1417, September.
    2. López-Pintado, Dunia, 2008. "Diffusion in complex social networks," Games and Economic Behavior, Elsevier, vol. 62(2), pages 573-590, March.
    3. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 797-817.
    4. Arun G. Chandrasekhar & Cynthia Kinnan & Horacio Larreguy, 2018. "Social Networks as Contract Enforcement: Evidence from a Lab Experiment in the Field," American Economic Journal: Applied Economics, American Economic Association, vol. 10(4), pages 43-78, October.
    5. Jackson Matthew O. & Rogers Brian W., 2007. "Relating Network Structure to Diffusion Properties through Stochastic Dominance," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 7(1), pages 1-16, February.
    6. de Martí Beltran, Joan, 2009. "Matthew O. Jackson, Social and Economic Networks , Princeton University Press (2008)," Regional Science and Urban Economics, Elsevier, vol. 39(5), pages 644-645, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vivi Alatas & Abhijit Banerjee & Arun G. Chandrasekhar & Rema Hanna & Benjamin A. Olken, 2016. "Network Structure and the Aggregation of Information: Theory and Evidence from Indonesia," American Economic Review, American Economic Association, vol. 106(7), pages 1663-1704, July.
    2. Zenou, Yves, 2012. "Networks in Economics," CEPR Discussion Papers 9021, C.E.P.R. Discussion Papers.
    3. Tabasso, Nicole, 2019. "Diffusion of multiple information: On information resilience and the power of segregation," Games and Economic Behavior, Elsevier, vol. 118(C), pages 219-240.
    4. Michel Grabisch & Agnieszka Rusinowska & Xavier Venel, 2019. "Diffusion in countably infinite networks," Documents de travail du Centre d'Economie de la Sorbonne 19017, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    5. Jackson, Matthew O. & López-Pintado, Dunia, 2013. "Diffusion and contagion in networks with heterogeneous agents and homophily," Network Science, Cambridge University Press, vol. 1(1), pages 49-67, April.
    6. Pongou, Roland & Serrano, Roberto, 2016. "Volume of trade and dynamic network formation in two-sided economies," Journal of Mathematical Economics, Elsevier, vol. 63(C), pages 147-163.
    7. Matthew O. Jackson & Brian W. Rogers & Yves Zenou, 2016. "Networks: An Economic Perspective," Papers 1608.07901, arXiv.org.
    8. Lamberson PJ, 2010. "Social Learning in Social Networks," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-33, August.
    9. Andrea Galeotti & Brian W. Rogers, 2013. "Strategic Immunization and Group Structure," American Economic Journal: Microeconomics, American Economic Association, vol. 5(2), pages 1-32, May.
    10. Manuel Förster & Michel Grabisch & Agnieszka Rusinowska, 2012. "Ordered Weighted Averaging in Social Networks," Documents de travail du Centre d'Economie de la Sorbonne 12056, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    11. Timothy G. Conley & Nirav Mehta & Ralph Stinebrickner & Todd Stinebrickner, 2024. "Social Interactions, Mechanisms, and Equilibrium: Evidence from a Model of Study Time and Academic Achievement," Journal of Political Economy, University of Chicago Press, vol. 132(3), pages 824-866.
    12. Rusinowska, Agnieszka & Taalaibekova, Akylai, 2019. "Opinion formation and targeting when persuaders have extreme and centrist opinions," Journal of Mathematical Economics, Elsevier, vol. 84(C), pages 9-27.
    13. Liu, Xiaodong & Patacchini, Eleonora & Zenou, Yves & Lee, Lung-Fei, 2011. "Criminal Networks: Who is the Key Player?," Research Papers in Economics 2011:7, Stockholm University, Department of Economics.
    14. Cabrales, Antonio & Calvó-Armengol, Antoni & Zenou, Yves, 2011. "Social interactions and spillovers," Games and Economic Behavior, Elsevier, vol. 72(2), pages 339-360, June.
    15. Elias Carroni & Paolo Pin & Simone Righi, 2020. "Bring a Friend! Privately or Publicly?," Management Science, INFORMS, vol. 66(5), pages 2269-2290, May.
    16. de Marti, Joan & Zenou, Yves, 2009. "Social Networks," Working Paper Series 816, Research Institute of Industrial Economics.
    17. Dunia Lopez-Pintado, 2016. "Influence networks and public goods," UMASS Amherst Economics Working Papers 2016-12, University of Massachusetts Amherst, Department of Economics.
    18. Tingqiang Chen & Binqing Xiao & Haifei Liu, 2018. "Credit Risk Contagion in an Evolving Network Model Integrating Spillover Effects and Behavioral Interventions," Complexity, Hindawi, vol. 2018, pages 1-16, March.
    19. Zenou, Yves & Patacchini, Eleonora & Liu, Xiaodong, 2013. "Peer Effects: Social Multiplier or Social Norms?," CEPR Discussion Papers 9366, C.E.P.R. Discussion Papers.
    20. Zenou, Yves, 2011. "Spatial versus Social Mismatch: The Strength of Weak Ties," Research Papers in Economics 2011:5, Stockholm University, Department of Economics.

    More about this item

    Keywords

    Microfinance; Diffusion; Social Networks; Peer effects;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:8770. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.