A Small Fee for Business Training Improves Course Attendance

A Small Fee for Business Training Improves Course Attendance


A vast amount of money is spent every year subsidizing free business training programs in developing countries. Their effectivness is unclear. Diego Ubfal, Development Economist at the Department of Economy, is studying this question with co-authors. “Most of the experiences of business training focuses on encouraging entrepreneurs to adopt good business practices,” he says. The researchers conducted an experiment in Jamaica and found that programs focusing on soft skills have larger effects on personal initiative, profits and sale, but only in the short run. After 12 months, without any form of mentoring, the effects disappear. The authors asked  whether charging for the programs would encourage attendence, more effort, adoption of the recommended practices.

They conducted another experiment in Jamaica. They elicited the willingness to pay in a incentivized way and then randomly varied the price charged for the program. The training was eventually provided only to micro-entrepreneurs whose willingness to pay was bigger than the price randomly assigned. By doing so, the researchers were able to assess the real willingness to pay and to test whether those who pay for the course are the ones who benefit more from it. The problem is that some people did not show up to pay. So, when they moved the experiment to Mexico, the researchers asked people to sign a commitment to pay and leave a deposit. “Now, we are collecting the follow-up survey to check the training effects, but we already have some results on attendance. Charging partially reduces the number of participants, with lower participation rates at a higher price, but it increases attendance at courses. Only 59% of people who were offered the program for free attended at least 5 classes (out of 10). This figure rises up to 90% among those who purchased the course at 50% of its cost. This could be important. Since most of these programs are offered for free by NGOs, making people pay at least a part of the cost would help these organizations to achieve sustainability.”

Read more about this topic:
Nicolai Foss. Entrepreneurship Goes beyond Startups
Carlo Mammola and Luigi Mastromauro. Predicting Startup Success with Data
Good Business Plan not Enough for Success. Interview to Alisée de Tonnac
Creating an Identikit of Entrepreneurs from 1850 to Present
Grow Your Business but Minimize the Risks
The Key Role of Taxation Regimes for Startups
Family Ownership Helps Cope with Political Uncertainty
Experimental DecisionMaking Approach Attracts Funding
Entrepreneurs Who Act Like Scientists Get Better Results
Avocado Toast Leads to Hot Brooklyn Startup. Interview to Alessandro Biggi
Turning “Spotify for Textbooks” into $4.8 mln. Interview to Perlego
Looking at Gender Bias in Funding Yields a Surprise Result
Family Firm Governance Results Linked to Context
Social Networks Foster Entrepreneurship
Taking Texting to the Next Level with Kaleyra. Interview to Dario Calogero
Connecting the Dots on How WWI Unleashed new Business Performance

by Claudio Todesco


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    COORDINA: PIETRO SIRENA Direttore della Scuola di Giurisprudenza PRESENTANO LA RELAZIONE: MAGDA BIANCO Capo Dipartimento tutela dei clienti ed educazione finanziaria, Banca d’Italia; MARGHERITA CARTECHINI Dipartimento tutela dei clienti ed educazione finanziaria, Banca d’Italia; NE DISCUTONO: FRANCESCO GIAVAZZI Senior Professor dell'Università Bocconi; SABINO CASSESE Giudice emerito della Corte Costituzionale e professore emerito della Scuola Normale Superiore di Pisa. CONCLUDONO: ALESSANDRA PERRAZZELLI Vice direttrice generale della Banca d’Italia; MARCO VENTORUZZO Direttore del Dipartimento di Studi giuridici


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