Dangers of a Double-Bottom Line: A Poverty Targeting Experiment Misses Both Targets

Dean Karlan, Adam Osman and Jonathan Zinman

No 24379, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Two for-profit Philippine banks, aiming to increasing microlending to the poor, incorporated a widely used poverty measurement tool into their loan applications and tested the tool using randomized training content. Treated loan officers were provided an explanation of the tool’s purpose; exhortation tying the tool to the organizations’ social missions; and reassurance that these data, conditional on other characteristics, do not predict default and thus should not jeopardize incentive pay based on portfolio performance. The control group training merely labeled the tool “additional household information.” The strategy backfired, leading to no additional poor applicants and potentially lower-performing loans. Descriptive evidence suggests the training exacerbated loan officer misperceptions about compensation incentives and multitasking problems. This cautionary tale is an example of why management may want include social outcomes directly into employee performance evaluations, or silo corporate social responsibility efforts from core operations.

JEL-codes: D12 D22 D92 G21 O12 O16 (search for similar items in EconPapers)
Date: 2018-03
New Economics Papers: this item is included in nep-exp and nep-mfd
Note: DEV PE
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Published as Dean Karlan & Adam Osman & Jonathan Zinman, 2023. "Dangers of a double‐bottom line? A poverty targeting experiment misses both targets," Journal of Economics & Management Strategy, vol 32(3), pages 510-522.

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Working Paper: Dangers of a Double-Bottom Line: A Poverty Targeting Experiment Misses Both Targets (2018)
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