Heuristics on Call: The Impact of Mobile Phone Based Business Management Advice

There is growing evidence that business training for micro-entrepreneurs can be effective. In-person training can be expensive and imposes costs on the target beneficiaries. This paper presents the results of a two-site randomized control trial evaluating the effectiveness of a light-touch, mobile phone-based business training for micro-entrepreneurs in India and the Philippines. We find that the training had a statistically significant impact on the adoption of improved business practices, with an increase of 0.07 to 0.13 standard deviation points. We find no evidence of impacts on sales or profits, though the confidence intervals are wide enough to include meaningful effect sizes (positive or negative). These results suggest that mobile phone-based training can be a cost-effective and scalable way to impart business skills to micro-entrepreneurs. ∗Cole: Harvard Business School, scole@hbs.com; Joshi: idea42, mjoshi@ideas42.org; Schoar: Massachusetts Institute of Technology Sloan School of Management, aschoar@mit.edu.

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