The currency of Hope

An MIT Professor known for studying poverty with data recently presented new research concluding that hope is quantifiable. She argued that some forms of aid for the very poor have outcomes that extend beyond the resources they create. The aid, if leveraged properly, can induce a sense of optimism that can itself generate more income.  

She and her colleagues evaluated a programme in the Indian state of West Bengal, where Bandhan, an Indian microfinance institution, worked with people who lived in extreme penury. They were reckoned to be unable to handle the demands of repaying a loan. Instead, Bandhan gave each of them a small productive asset—a cow, a couple of goats or some chickens. It also provided a small stipend to reduce the temptation to eat or sell the asset immediately, as well as weekly training sessions to teach them how to tend to animals and manage their households.

So what happened?

Well after the financial help and hand-holding had stopped, the families of those who had been randomly chosen for the Bandhan programme were eating 15% more, earning 20% more each month and skipping fewer meals than people in a comparison group. They were also saving a lot. The effects were so large and persistent that they could not be attributed to the direct effects of the grants: people could not have sold enough milk, eggs or meat to explain the income gains. Nor were they simply selling the assets (although some did).

Read the whole article via The Economist here. Hope is more than a positive  outlook on the future. It sounds like it can change it.