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We measure the extent to which social networks determine sources of credit from a survey of 465 households in western Guatemala. We estimate correlated, contextual and endogenous effects of networks at the neighborhood, church, and village levels, finding that church networks display endogenous effects in credit access. We calculate an elasticity of social imitation (ESI) indicating if the percentage of people accessing microfinance in a church network doubles, the probability of an individual household accessing microfinance increases by 14.1 percent, a magnitude similar to our estimated ESIs for televisions and cell phones within church and neighbor networks.


NOTICE: this is the author’s version of a work that was accepted for publication in World Development. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Bruce Wydick, Harmony Karp Hayes, Sarah Hilliker Kempf. Social Networks, Neighborhood Effects, and Credit Access: Evidence from Rural Guatemala. World Development. Volume 39, Issue 6, June 2011, Pages 974–982.

Presented at the Pacific Conference for Development Economics and at the University of California at Santa Barbara, and the Conference on Microfinance, University of Groningen, the Netherlands.



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