If you have purchased a pair of TOMS shoes, you may remember a tag promising that with each pair purchased, TOMS will donate a pair to a child who needs them. This kind of charity is called "aid-in-kind." Does this kind of aid help to improve people's lives? Or might it have no effect or even a negative effect? This Economist article summarizes some potential downsides to aid-in-kind philanthropy:
Handing out aid in kind gives plenty to worry about. It could suck life from local markets, and foster a culture of aid-dependency. Handing out goods rather than cash runs the risk of spending money on things people neither need nor want.
The Economist article points out that TOMS took the bold step of deciding to test whether their free shoes program was having positive or negative effects on communities. They conducted a randomized experiment with several dependent variables. The journalist describes how the company
…asked a group of academics to investigate and gave them assurances that they could publish whatever they liked. In late 2012 they randomly picked which of 1,578 children across 18 rural communities in El Salvador would receive pairs of TOMS’ black-canvas, rubber-soled shoes. By comparing the places and children who received the shoes with ones that did not, they could work out how much these boots really gave back.
a) What was the independent variable in this study? Was the experiment independent groups or within groups, and how do you know?
b) Now, read the following description and identify three of the dependent variables they measured:
[they] found that TOMS was not wrecking local markets. On average, for every 20 pairs of shoes donated, people bought just one fewer pair locally—a statistically insignificant effect. The second study also found that the children liked the shoes. Some boys complained they were for “pregnant women” and some mothers griped that they didn’t have laces. But more than 90% of the children wore them.
c) Here are some more findings–name these dependent variables, too (there are at least six more mentioned here):
Unfortunately, the academics failed to find much other good news. They found handing out the free shoes had no effect on overall shoelessness, shoe ownership (older shoes were presumably thrown away), general health, foot health or self-esteem. “We thought we might find at least something,” laments Bruce Wydick, one of the academics. “They were a welcome gift to the children…but they were not transformative.”
More worrying, whereas 66% of the children who were not given the shoes agreed that “others should provide for the needs of my family”, among those who were given the shoes the proportion rose to 79%. “It’s easier to stomach aid-dependency when it comes with tangible impacts,” says Mr Wydick.
d) The results for general health, foot health, and self-esteem were null effects, which you can read about in Chapter 11. One probable reason the study found a null effect is that giving out free shoes doesn't actually impact people's health or self-esteem. What are some other possible reasons for this null effect? (Use Table 11.2 to guide your answer).
Coda:
You might be interested to learn how TOMS has reacted to these results. They have used the research to refine their program:
The findings have prompted TOMS to change its strategy. It is adopting approaches more likely to have a big impact, such as matching purchases of sunglasses with free sight-correction. Increasingly it gives shoes as rewards for children who join community-building projects.