Many agricultural and environmental technologies require upfront investments. This may deter adoption, particularly in settings characterized by information, liquidity, and credit constraints. We test for these barriers to the adoption of an agricultural technique that helps address land degradation in Niger. We find little evidence that liquidity or credit constraints deter adoption: instead, providing farmers with training increases the share of adopters by over 90 percentage points. Conditional or unconditional cash transfers have no additional effect. Adoption increases agricultural output and reduces land turnover in the longer term. In our setting, training provides both specific technical knowledge and addresses behavioral constraints.

Environmental quality in many developing countries is poor and generates substantial health and productivity costs. However, the few existing measures of marginal willingness to pay (MWTP) for environmental quality improvements indicate low valuations by affected households. This paper argues that this seeming paradox is the central puzzle at the intersection of environmental and development economics: Given poor environmental quality and high health burdens in developing countries, why is MWTP seemingly so low? We develop a conceptual framework for understanding this puzzle and propose four potential explanations for why environmental quality is so poor: (1) due to low income levels, individuals value increases in income more than marginal improvements in environmental quality; (2) the marginal costs of environmental quality improvements are high; (3) political economy factors undermine efficient policymaking; and (4) market failures such as weak property rights and missing capital markets distort MWTP for environmental quality. We review the literature on each explanation and discuss how the framework applies to climate change, which is perhaps the most important issue at the intersection of environment and development economics. The paper concludes with a list of promising and unanswered research questions for the emerging sub-field of “envirodevonomics.”

High rates of customer default on utility bills present a barrier to the expansion of electricity access in the developing world. Pre-paid electricity metering offers a technological solution to ensuring timely payment. Using an eleven-year panel of pre-paid electricity customers in Cape Town, South Africa, we describe patterns of purchase behavior across property values, our measure of socioeconomic status. Poorer households buy electricity more often, in smaller increments, and are most likely to buy on payday. These patterns suggest difficulties smoothing income, and reveal a preference for small, frequent purchases that is incompatible with a standard monthly electricity billing cycle.

Rural economies in many developing countries are characterized by a lean season in the months preceding harvest, when farmers have depleted their cash and grain savings from the previous year. To identify the impacts of liquidity during the lean season, we offered subsidized loans in randomly selected villages in rural Zambia. Ninety-eight percent of households took up the loan. Loan eligibility led to increases in on-farm labor and agricultural output, driving up wages in local labor markets. Larger effects for poorer households suggest that liquidity constraints contribute to inequality in rural economies.

We investigate the link between poverty and decision-making in a sample of farmers in Zambia, who were given the opportunity to exchange randomly assigned household items for alternative items of similar value. Analyzing a total of 5,842 trading decisions and leveraging multiple sources of variation in financial constraints, we show that exchange asymmetries decrease in magnitude when participants are more constrained. This result is robust to experimental procedures and is not mediated by changes in cognitive performance. Consistent with the interpretation that scarcity leads to more rational decisions by increasing the utility loss from forgone trading, we show that trading probabilities go up when the market value of the items is exogenously increased.