We invite you to a FAIR Seminar with Ronak Jain. Ronak is an Assistant Professor of Economics of Development and Child Welfare at the University of Zurich. Her work lies at the intersection of development and behavioral economics. Her research leverages field experimentation and observational data.
Title:Entrepreneurs of Emotions: Evidence from Street Vending in India
Abstract:
Street vending is an important source of self-employment for the urban poor. I use primary observation, survey, and experimental data from Delhi to study this market. Partnering with street vendors to randomize both prices and the passersby they solicit to try to make sales, I find that even with identical goods, child vendors are 97% more likely to make a sale and earn more than twice that of adult vendors. Despite no differences in valuation for the goods, couples and female customers are 90% and 27% more likely to buy than male customers. Females and couples are 50% more likely to be targeted by vendors than males and are charged higher prices on average (4-38%) than males. I show that these findings are consistent with a model that incorporates altruism and a cost of refusal in the buyer's decision-making. In line with this, I find that passersby are more altruistic towards children than adults in an incentivized dictator game. Additionally, requesting passersby to buy increases the purchasing probability twofold for adult vendors and fourfold for child vendors. Survey data further confirms that vendors target females or couples, over males, because they consider who would find it harder to refuse. The paper shows that sellers strategically leverage insights about social preferences to influence buyer decision-making and this creates a source of comparative advantage for children in this market.