Can reducing alcohol abuse boost agricultural productivity? New field experimental evidence from rural Kenya suggests the answer is yes. In a study forthcoming in the American Economic Journal: Economic Policy, Assistant Professor of Economics David Murphy evaluates the economic effects of a randomized intervention designed to curb harmful drinking among rural households in Kenya. The paper, “Alcohol, Labor, and Agriculture,” uncovers interesting and important links between psychological interventions and economic well-being.
The study analyzes a program that offered cognitive behavioral therapy and medication to reduce alcohol abuse among selected households. Sixteen months after the intervention, men in treated households were 14 percentage points less likely to register positive breathalyzer tests and 19 points less likely to engage in heavy drinking. These behavioral changes translated into meaningful economic gains: treated households reported 32% higher real annual harvest values.
Why was the program so effective? The research points to several reinforcing mechanisms—households shifted spending away from alcohol, individuals exhibited improved self-control, and peer groups shared information more effectively. Together, these channels illustrate how psychological interventions can generate meaningful economic benefits.