Ofer Malamud and

Cristian Pop-Eleches look at the effects of a program that gave poor households a voucher to purchase a computer. (The program was Romanian but the results may hold lessons for similar programs around the world.) Households with incomes directly below a cutoff level were given a voucher while households with incomes directly above the cutoff were not. Thus, households which were very similar were treated differently and this lets the authors use a regression discontinuity design that makes their results credible as representing a causal effect. The results of a regression discontinuity design are also very easy to explain with figures.

The income cutoff is shown by the red line. Beginning at the top left we see that households with incomes just below the cutoff were much more likely to have a computer than households with incomes just above the cutoff – thus the voucher program has a big effect on computer ownership. The top right figure shows similarly that the voucher program increased computer usage since computers were used much more often in households with incomes just below the cutoff than in the non-eligible-for-voucher households with incomes just above the cutoff.

Now take at look at the figures below. The one on the left shows that the voucher program significantly increased the time spent playing computer games. The one on the right which looks at the effect of the voucher program on the use of computers for homework – well, the punch line is clear.

Not surprisingly, with all that game playing going on, the authors find that the voucher program actually resulted in a decline in grades although there was also some evidence for an increase in computer proficiency and perhaps some improvement in a cognitive test.

Hat tip to David Youngberg at the SeetheInvisibleHand.