The human side of statistics
An urge to find out what makes people behave in certain ways drives Professor Lisa Cameron’s research. Her interest in different people and cultures finds particular focus in issues related to living in poverty in developing countries.
Lisa is the director of Monash’s Development Research Unit, which considers economic and social problems in the developing world. And the work has a practical emphasis, with researchers often working alongside governments and other agencies to help assess and determine suitable policies.
“Economic models are about why people make the choices they do,” she says. “A lot of people think of economics as being about money but it’s not really. I use statistics to study human behaviour and human issues.”
One of her recent projects has looked at whether a diminished interest in risk-taking is a likely consequence for people who have experienced the destructive effects of floods or earthquakes. Such natural disasters disproportionately affect people in the developing world.
As part of the research, people were asked to play games carefully constructed to determine their willingness to take risks. They would, for example, be given a choice of lotteries ranging from one with a guaranteed but modest return up to one where they could win a much larger sum, but might win nothing.
“We find that people who have experienced a flood or an earthquake are much less likely to take risks,” Lisa says. The consequences of this can be highly significant: people who are wary of risks may be unwilling to plant a different variety of seed that might improve their crop yields, or to try a new technology that could help increase their income.
Using this kind of game to test people’s responses puts Lisa’s work at the intersection of development economics and experimental economics.
Another experimental approach involves the use of randomised control trials, in which people are randomly exposed to actual policies as the researchers attempt to determine their potential effectiveness. This has been applied by Lisa and colleagues in a trial of a sanitation program in East Java, for which they received World Bank and Australian Research Council funding.
The program was implemented in some villages but not others, which acted as controls. Researchers have tracked child health in all the villages since the project began in 2007 and data analysis is now under way.
Much of Lisa’s research is on Indonesia, but she is also doing some work on China, including an assessment of the behavioural impact of the one-child policy.
“We find really large differences in behaviour between people who were born just before and just after the one-child policy was introduced,” she says. “The consequence of the policy was to make people less trusting, less trustworthy, more risk-averse, less competitive and more pessimistic.”
Cameron, L., Olivia, S., 2011, Sanitation and health: The past, the future and working out what works, in Employment, Living Standards and Poverty in Contemporary Indonesia, eds Chris Manning and Sudarno Sumarto, ISEAS, Singapore, pp. 245-269.
Cameron, L., Gangadharan, L., Ashok, S., 2010, Kuznets curve, in Famous Figures and Diagrams in Economics, eds Mark Blaug and Peter Lloyd, Edward Elgar Publishing Ltd, Cheltenham UK, pp. 439-446.
Amiti, M., Cameron, L.A., 2012, Trade liberalization and the wage skill premium: Evidence from Indonesia, Journal of International Economics [P], vol 87, issue 2, Elsevier BV, Amsterdam Netherlands, pp. 277-287.
Cameron, L.A., 2009, Can a public scholarship program successfully reduce school drop-outs in a time of economic crisis? Evidence from Indonesia, Economics of Education Review [P], vol 28, issue 3, Pergamon, Oxford UK, pp. 308-317.
Alatas, V., Cameron, L.A., Chaudhuri, A., Erkal, N., Gangadharan, L., 2009, Gender, culture, and corruption: Insights from an experimental analysis, Southern Economic Journal [P], vol 75, issue 3, Southern Economic Association, Richmond USA, pp. 663-680.
Cameron, L.A., William, J., 2009, Is the relationship between socioeconomic status and health stronger for older children in developing countries?, Demography [P], vol 46, issue 2, Population Association of America, Silver Spring USA, pp. 303-324.
Cameron, L.A., Chaudhuri, A., Erkal, N., Gangadharan, L., 2009, Propensities to engage in and punish corrupt behavior: Experimental evidence from Australia, India, Indonesia and Singapore, Journal of Public Economics [P], vol 93, issue 7-8, Elsevier BV North-Holland, Amsterdam Netherlands, pp. 843-851.
Cameron, L.A., Cobb-Clark, D., 2008, Do coresidency and financial transfers from the children reduce the need for elderly parents to works in developing countries?, Journal Of Population Economics [P], vol 21, issue 4, Springer, Hiedelberg Germany, pp. 1007-1033.
Alatas, V., Cameron, L.A., Chaudhuri, A., Erkal, N., Gangadharan, L., 2008, Subject pool effects in a corruption experiment: A comparison of Indonesian public servants and Indonesian students, Experimental Economics [P], issue 1, Springer New York LLC, New York USA, pp. 1-20.
Alatas, V., Cameron, L.A., 2008, The impact of minimum wages on employment in a low-income country: A quasi-natural experiment in Indonesia, Industrial and Labor Relations Review [P], vol 61, issue 2, Cornell University, Ithaca USA, pp. 201-223.
Amiti, M., Cameron, L.A., 2007, Economic geography and wages, Review Of Economics And Statistics [P], vol 89, issue 1, MIT Press, Cambridge USA, pp. 15-29.
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