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The Economics of Poverty Traps$
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Christopher B. Barrett, Michael R. Carter, and Jean-Paul Chavas

Print publication date: 2018

Print ISBN-13: 9780226574301

Published to Chicago Scholarship Online: May 2019

DOI: 10.7208/chicago/9780226574448.001.0001

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Hope as Aspirations, Agency, and Pathways Poverty Dynamics and Microfinance in Oaxaca, Mexico

Hope as Aspirations, Agency, and Pathways Poverty Dynamics and Microfinance in Oaxaca, Mexico

(p.153) 4 Hope as Aspirations, Agency, and Pathways Poverty Dynamics and Microfinance in Oaxaca, Mexico
The Economics of Poverty Traps

Travis J. Lybbert

Bruce Wydick

University of Chicago Press

The majority of the research on poverty traps has concentrated on dynamics arising from external constraints such as missing credit, labor, and land markets or structural features such as locally increasing returns to scale in production. Recent work in behavioral economics, however, has illuminated the potential for development traps based on internal psychological phenomena. In this research, we address the subject of hope, which may form a key component to breaking cycles of poverty. Work in positive psychology by Snyder (1994) decomposes hope into aspirations, agency, and pathways. Operating in the context of an economic model developed with this framework, we review the literature on hope from psychology, philosophy, and theology, and its relationship to emerging work on aspirations in development economics. We then present one-month follow-up results from an experimental study based on a hope intervention in Oaxaca, Mexico among 601 indigenous women with access to microfinance loans. Our early experimental results suggest that the intervention raised aspirations approximately a quarter of a standard deviation, significantly raised a hope index among the treated subjects, and had positive but statistically insignificant results on enterprise revenues and profits.

Keywords:   hope, poverty, development, aspirations, microfinance, community banking, randomized trial, agency, Mexico, gender empowerment

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