TY  - JOUR
AU  - Beaman, Lori
AU  - Karlan, Dean
AU  - Thuysbaert, Bram
AU  - Udry, Christopher
TI  - Self-Selection into Credit Markets: Evidence from Agriculture in Mali
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 20387
PY  - 2014
Y2  - August 2014
DO  - 10.3386/w20387
UR  - http://www.nber.org/papers/w20387
L1  - http://www.nber.org/papers/w20387.pdf
N1  - Author contact info:
Lori A. Beaman
Department of Economics
Northwestern University
2001 Sheridan Road
Evanston, IL 60208
Tel: 847/491-5394
Fax: 847/491-7001
E-Mail: l-beaman@northwestern.edu

Dean Karlan
Kellogg Global Hub
Northwestern University
2211 Campus Drive
Evanston, IL 60208
Tel: 847/491-8706
E-Mail: dean.karlan@gmail.com

Bram Thuysbaert
Ghent University
Sint-Pietersnieuwstraat 25
9000 Gent, Belgium
E-Mail: bram.thuysbaert@ugent.be

Christopher R. Udry
Northwestern University
Department of Economics
Weinberg College of Arts and Sciences
2211 Campus Drive #3247
Evanston, IL 60208
Tel: 203/432-3637
E-Mail: christopher.udry@northwestern.edu
AB  - We examine whether returns to capital are higher for farmers who borrow than for those who do not, a direct implication of many credit market models. We measure the difference in returns through a two-stage loan and grant experiment. We find large positive investment responses and returns to grants for a random (representative) sample of farmers, showing that liquidity constraints bind. However, we find zero returns to grants for a sample of farmers who endogenously did not borrow. Thus we find important heterogeneity, even conditional on a wide range of observed characteristics, which has critical implications for theory and policy.
ER  -