The authors report impacts of a randomized housing quality improvement intervention among Indian migrant workers. Despite modest imrpovements in conditions, respondents experienced a decline in satisfaction and a large increase in psychological distress as a result of treatment. In contrast, residents who faced the same treatment-induced variation in living conditions as the original sample, but who arrived after treatment had already been initiated, had increased satisfaction. Impacts on turnover echo these patterns. They interpret this as evidence of reference dependence: residents who were primed to expect larger-than-realized improvements in living conditions suffered utility losses, while exposed but unprimed residents experience gains.
This research was funded under the Private Enterprise Development in Low Income Countries (PEDL) Programme
Adhvaryu, A., Nyshadham, A., and Xu, H. (2018) “Hostel Takeover: Living Conditions, Reference Dependence, and the Well-Being of Migrant Workers
Published 15 January 2019