Aspirations in Rural Pakistan: An Empirical Analysis
Presenter: Katrina Kosec
Research Fellow, IFPRI
Discussant: Jessica Heckert
Associate Research Fellow, IFPRI
Tuesday, July 28, 12:30pm-1:30pm EST
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Aspirations are goals which people set and intend to achieve; they are increasingly being recognized as an important outcome of interest when considering poverty reduction strategies. As Adam Smith once noted, “The real tragedy of the poor is the poverty of their aspirations.” We examine the aspirations of individuals in 2,090 rural households in Pakistan surveyed by IFPRI in 2012 and again in 2013. We begin by examining individual and household correlates of aspirations, including gender and socioeconomic status. We then analyze what factors might shape aspirations—including how policymakers might raise them. In doing so, we exploit both cross-sectional and panel data to examine how community institutions and infrastructure predict aspiration levels, changes in them over time, and gender gaps in aspirations. Finally, we carry out cross-sectional and panel data analysis to examine how well aspirations predict agricultural input choice, crop yields, economic behavior, and financial decision making. We show that aspirations are closely linked to whether citizens engage in forward-looking political and economic behavior.
We next step back and look at aspiration formation. Specifically, how do negative economic shocks affect citizens’ aspirations for the future, and can governments’ social protection policies successfully mitigate any damaging effects? Using a natural experiment in Pakistan, the 2010 floods, to identify the effects of a large economic shock on citizens’ aspiration levels, we find that citizens’ aspirations were significantly reduced—especially among the poorest and most vulnerable. However, targeted government social protection policies following natural disasters can significantly reduce their negative aspirational effects. We find that disaster-targeted social protection not only raises social welfare in the short term, but it also has an enduring effect by raising citizens’ aspirations for the future. Our results suggest that not only does the aspiration level of citizens matter, but also that government policies can affect the aspirations of its citizens.