Going to the field as an Economist
What does it mean when an economist talks about field work? What is experimental economics? How do you do experiments when your sample are humans? If those questions are on your mind then this little text is for you.
Picture 1. Introducing ourselves to the participants.
Being the economist in an interdisciplinary team, people often think of you as the person crunching numbers, or model some abstract, not too realistic world. And let’s be honest, often we economists fit these roles.
Yet, there is a very fascinating side of being an economist which is called experimental economics. What does this mean? Try telling your mum you do experiments with people to see how they change their behaviour. Mine looked at me very horrified. To avoid those looks I wrote this piece on what an experimental economist does in the field.
What does Experimental Economics mean?
Experimental economics describes a method in economics which uses experiments to show causality. In general it works like experiments in natural science. You have a hypothesis you want to test. For this, you select an appropriate sample which you divide into two groups. The control group and the group you manipulate. You try to create a clean environment which lets you manipulate single aspects and see whether/how this changes the behaviour of the participants.
A public good is a good which is non-excludable and non-rivalrous. This means that anybody can use the good without having to pay for it and that the use by one person does not reduce the availability of the good to another person.
Experiments can be done either in the lab (which means usually computers and students), in the field, or you run a lab-in-the-field experiment (which is what we did). Economists use abstract settings (called games) to analyse the behaviour. A rather popular game in resource economics is the public goods game. The idea is to analyse how a group of people cooperates to create a public good. In an abstract setting this translates to something like this:
“We will give each of you an endowment of 6000 Riels, containing six bills of 1000 Riels. With this endowment of 6000 Riels, you have to decide how much you want to keep for yourself and how much you want to contribute to a group fund. The group fund is the money contributed by you and your partner. The difference between the money you keep for yourself and the group fund is that the money you keep to yourself remains the same, but the group fund is increased. For every 1000 Riel in the group fund, there will be 500 Riel added. After the money in the group fund has been increased, the total money will be divided equally between you and your partner, irrespective of how much you or your partner have put into the group fund.“
One thing that is essential for experiments in economics is that they are incentivised. This means that in every task the participants can earn money. This way their decisions have real life consequences.
How does the lab-in-the-field look in action?
In our case the field was the Cambodian countryside with fishers and farmers as participants.
Doing field work poses the difficulty that you need to establish a portable lab. While this is usually done with tablets this was not an option for us, since we had the added issue that most of our participants are illiterate. So we needed to ensure that people understood the task without having to read and write. We designed posters and had an instructor explaining the task (see picture 2). In order to facilitate understanding we did examples with the participants. Only after having ensured that the task was understood we ‘built’ our portable lab (see picture 3).The participants divided the money into the group fund and the private fund by putting the money in different coloured envelopes. These envelopes were collected and the data immediately entered to determine the payoff of the participants. Those were the moments when field work became quiet literal since my office was on some kind of tractor (Cambodians call them mechanical cow) (picture 4).
Challenges and rewards of the field work.
As with all field work, there are unexpected challenges to overcome such as “Where do we put the poster?” (I like the poster holder in figure 1 best). Also the physical strain can be intense when you are sitting in rural Cambodia without a fan in 36 degrees Celsius heat with 90 percent humidity. But of course you also get to experience and see things you would never encounter if you would conduct the same experiment in a lab. I lost count of all the mangos and cakes I got ....
As with every field work, once the data is collected you have to go back to analyse it and write a nice paper. So watch this space for when we will shed some light on the cooperative behaviour of Cambodian fishers and farmers.