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Crowdsourcing Economics

An interesting approach to economics, from UC Berkeley economists William FuchsBrett Green, and David Levine: crowdfunding.

But first, some background, because this is fascinating stuff. The typical household in rural Africa is “off the grid.” With no electricity, such households spend a significant fraction of their income on kerosene for lamps. Yet for about $20, they can buy a solar light, which provides a superior source of light and charges their cell phones. (Yes, cell phone use is common, even in rural households with no electricity; they simply walk to the nearest town and pay to charge their phones.)  Given that the light pays for itself in about 6 weeks and lasts for about 3 years, purchasing one seems like a no-brainer. Yet few households have done so.  These intrepid economists are trying to figure out why, and want to see whether the barriers to adoption can be overcome in a profitable way. In order to do so, they are running controlled experiments in rural Ugandan villages using various combinations of incentives and financing arrangements.

It’s a terrific and important research question. The only barrier is that they need funding for their research.  So they’re trying something new: crowdfunding.  You can read all about it here.  Think of it as the Kickstarter of development economics.  But better.  They’re letting donors into the emotional roller coaster that is economic research: For $25, you get updates directly from the professors; for $250, they’ll talk about it over coffee; and for $2,500, they’ll entertain you over dinner.  I know these guys, and I’ve gotta say, even at that highest level, you’re set for a more entertaining, interesting, and inspiring dinner than you would see even at a TED conference, which costs twice as much.


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