Measuring Marginal Returns in Microenterprises, Experimentally

Authors

Suresh de Mel, University of Peradeniya
David McKenzie, World Bank
Christopher Woodruff, UCSD

Abstract

We report on a field experiment providing random grants to microenterprise owners. The grants generated large profit increases for male owners, but not for female owners. We show that the gender gap does not simply mask differences in ability, risk aversion, entrepreneurial attitudes, or differences in reporting behavior, but there is some evidence that the gender gap is larger in female-dominated industries. The data are not consistent with a unitary household model, and indeed, imply an inefficiency of resource allocation within households. We show evidence that this inefficiency is reduced in more cooperative households.