Part D. Short Answers [25 points total] You can make additional assumptions to clarify your interpretation of any of the questions if you wish, but state your assumptions clearly. Malaria is an infectious disease transmitted by mosquitoes. There are many developing countries in which malaria causes substantial illness and death. Mosquitoes breed in standing water, which is quite persistent in tropical areas. Suppose that you have been asked by the government of Laos to determine (i) the economic effects of high malaria, and (ii) how to reduce new infections. 1. [3 points] In many remote villages, people visit traditional healers when they have malaria. Government ofcials believe tha t this is because rural villagers are uneducated and don't know about modern medicine. What are two alternative explanations for the popularity of traditional healers? 2. [5 points] The government believes that bednets (that keep mosquitoes away from people when sleeping) will reduce the onset of new infections. They would like to provide free bednets to individuals in rural areas. How would you measure the effects of such a program on malaria using a randomized evaluation? 3. [4 points] Now suppose the government is debating whether or not to start a bednet program. Some people in the government are worried that they can only finance bednets for 75% of households. Some are arguing that if everyone cannot be covered, then the program should not go ahead. Thinking about externalities, what would you advise the government to do? 4. [5 points] Given the long- term costs of bednets and concerns about sustainability, the Ministry of Finance would like to know (i) if people are willing to pay for bednets in the future and (ii) if so how much. Describe a randomized evaluation to answer these two questions. 5. [3 points] A foreign aid agency has offered to nance your research evaluation efforts. They have a limited budget and argue that you do not need a baseline survey to recover a causal effect in the randomized evaluation design that you proposed in (2). Do you agree? Why or why not? 6. [5 points] One way in which households can deal with the adverse effects of malaria on household income is by sending some members to work in urban areas, which have higher wages and less malaria. Yet, in practice, very few households send any migrants to go to work in cities despite the seemingly high returns from doing so. One political party (A) tells you this is because the poor in these villages cannot afford the high costs of migration to cities. Another political party (B) tells you this is because the risks of not nding a job in the city are too high. Design a randomized experiment using the 100 study villages to see which party's views are closer to the truth. What treatment(s) will you propose to distinguish between these views? What outcomes will you measure? (HINT: You will need at least 2 treatment groups. Bryan et al (2013) look at this type of question in their study in Bangladesh.)
