Asking the right question

Dean Karlan gives an online tutorial on the importance of identifying the real counterfactual, in response to the recent controversy about World Vision’s NFL t-shirt donations to Africa 

The choice is not between (a) doing nothing — which, critics infer, would leave Africans to produce and sell 100,000 new t-shirts — and (b) shipping 100,000 t-shirts to Africa. Rather, the choice is between (a) selling the t-shirts in the U.S. as rags (or novelty souvenirs for delusional Steelers fans) and then sending to Africa the proceeds plus the money that would have been spent on shipping, or (b) shipping 100,000 t-shirts to Africa.

In other words, the NFL surely isn’t going to pay local producers to make 100,000 t-shirts after the Super Bowl. That option is not on the table. So in the end, the t-shirt migration has one pro and two cons, and we have no real data to tell us what to do. The pro: some people in Africa get some t-shirts, and hopefully those people extract some value from the t-shirts (either by wearing them or by selling them). The first con: market prices for t-shirtsmay go lower in Africa, and this adversely affects some. The second con: there may simply be a better way, such as selling the t-shirts in the US and sending the profits, as in (a) above.

Tom responds here. Also, other posts on this issue here – mostly critical of the view that we can’t be sure if this instance of GIK is good or bad. 

My take – its hard to tell anyway, and more so if we get all ideological about it. So to begin with, one must ask the right questions, like what is the real counterfactual? 


5 Replies to “Asking the right question”

  1. I think Dean Karlan's counterfactual makes sense if you're primarily discussing the shirts. But if you care primarily about how aid organizations should behave, the counterfactual might be “World Vision chooses to use the same amount of money and staff time on something else” vs. the status quo of “World Vision chooses to continue sending the shirts abroad every year.”


  2. Thanks for the link over, Suvojit. I would probably say I was inspired by rather than responding to. Truth is that I had written the post the night before and added the Karlan part since it was relevant.

    Either way, he is right that there needs to be actual data behind these discussions. So far, as I showed in my post, we really only know about the SHC trade.

    Great question at the end.


  3. brett, if WV was printing these t-shirts or buying them in the market and then transporting them to accra, it would be something else entirely. So I am still not sure if the question you propose is the right one

    Tom, sorry about the 'responds' – if anything, it was only because I thought yours was a good response to Dean's views


  4. Suvojit,
    The shirts are donated to WV, but that doesn't mean there aren't any costs associated with them. They spend a lot of staff time coordinating such donations, staff and/or volunteer time sorting them, money shipping them, and time and money distributing them. In other words, there are still a lot of costs that add up even for this one small part of their gifts-in-kind programming. So I think the counterfactual for WV from an organization perspective is whether to use this time and money for the NFL shirts, or for purchasing local shirts, or for doing something else entirely.



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