Student exchange program transfers economics lessons from Blacksburg classrooms to South American villages
In Peru, the landscape is older than the sound of bells and snow on mountains, but modern-day life here commands attention. In this vast, knitted-together country of coasts, mountains, and jungles, 14 undergraduates from Virginia Tech and the University of Piura learn to apply the techniques of behavioral economics to resolve a range of problems, from deforestation and accumulating waste piles to child mortality and flagging schools.
In the span of less than two weeks, the students will hear lectures in Lima, y to Piura, visit a ood-ravaged town, take a four-hour winding bus ride to rural Chalaco, learn about deforestation, conduct a survey in a small village (after walking an hour to get there), and spend a magical hour atop the Andes.
They’ll conclude by working in teams to craft a pilot intervention costing a theoretical $100,000. They’ll pitch those change-the-world ideas to their two professors, Marcos Agurto of the University of Piura and Sheryl Ball of the Department of Economics in Virginia Tech’s College of Science. They’ll compete, arguing that their projects are valid and worthy of funding.
Along with three other Virginia Tech students, Sana Ahmad lands in Lima on an overnight flight from Dallas. She’s excited to try out her Spanish and is immediately humbled. “I thought I was pretty good, but I was slow,” she says, laughing. Both of her parents are from India and exposed her to foreign languages early. “The Peruvians thought I was Peruvian until I started speaking Spanish!” she says.
Introduction to Lima
Peru is the land of Incan gold and cultures even more ancient than the Incas, such as the Nazca, which created stunning innovations in the art world. The Nazca stocked the country’s pre-Columbian treasure trove with statues, including an iconic killer whale that brims with attitude and teeth.
In Lima, the students learn that Peru exerts a pull on the senses that can clash with the need to focus on academics. Exquisite food can be had virtually everywhere in a country whose restaurants appear on world top-10 lists.
But — prepped by a week of study at Virginia Tech’s campus in Blacksburg and a day in Washington, D.C. — the U.S. and Peruvian students stave off cultural and culinary distractions. Fighting travel fatigue, they dive into what seems like a crash-course pace, beginning each day with language classes, Spanish and English.
At the University of Piura’s Lima campus, a diplomat speaks proudly of the nation’s indigenous past, pointing out that Peruvian civilization predates ancient Greece and Rome. He details the execution of Francisco Pizarro, Lima’s founder, by fellow Spaniards. The former leader’s bones are part of a prominent display in the Lima Cathedral.
After the lecture, students spill out into the breezes of the campus courtyard. Here, they take their first break, cracking out their cellphone cameras to record a few minutes of traditional dance demonstrated by a young, costumed couple who leap and duck and flirtatiously weave.
Diving deep into behavioral economics
From Lima, a two-hour flight north puts the students in Piura. The Virginia Tech students are met at the airport by smiling host families with placards bearing the names Hannah, Hannah (there are two), Jessica, and Sana. To keep them straight, one of the professors confers the nickname “Engineering Hannah” on Hannah Looney, who’s majoring in industrial and systems engineering.
Piura (population 400,000 in contrast to Lima’s 10 million) is about 45 minutes from the coast. On the university’s grassy campus, big iguanas skulk across the lawns or climb trees. Peacocks and small deer roam freely.
As the first morning in Piura unfolds, Agurto, who has taught as an adjunct at Virginia Tech, stresses the concept of listening before designing answers to problems. He also explains the need for control groups and randomization — essential to knowing whether an “intervention” has worked.
The students are asked to consider: Is aid to developing countries good or bad? Does it create dependency? Do policymakers offer expert help and then simply hope the situation gets better? Or do they stand by, do nothing, and watch problems play out? Economists must find ways, as Agurto puts it, “to know what works, and why.”
“I like that we are going to be doing interviews with people to find out what they actually need — not what we think they might need.”
The lecture is an eye-opener. Jose Luis Herrera Hinojosa, one of the University of Piura students, previously doubted whether becoming an economist would enable him to contribute to society. He now understands that even a simple intervention — say, a plan to encourage vaccination in children by giving their parents a reward — can improve lives.
“We can do things — we can propose the right things, things that we are sure are going to be good,” he says. Buoyed by Agurto’s enthusiasm, he adds: “In the future, I can better participate in my local and central governments. I can propose better policies. What I’m learning has helped me realize how the world can work better.”
Hannah Looney says Agurto’s quest for discernment planted seeds of healthy skepticism. Now, when making charitable donations, she’ll question whether she should “send money to an organization that’s going to give water to the people — but maybe what the people really need is blankets.”
Anticipating upcoming fieldwork in the Andes, Looney says, “I like that we are going to be doing interviews with people to find out what they actually need — not what we think they might need.”
Lessons from a flooded village
In spring 2017, a triple whammy of El Niño, climate change, and deforestation nearly destroyed the town of Pedregal, not far from Piura. For Agurto, Pedregal is an object lesson with big takeaways for the students.
They pile into a large van to make their first stop, the Piura River, which breached its banks in 2017 when 10 times the normal amount of rain drenched coastal areas. Standing near the riverbanks, Agurto introduces the idea that even distant deforestation plays a role in magnifying such disasters. Erosion in the Andes, hours away by car, exacerbates floods. Water and sediments flush down from the highlands.
Sana Ahmad, a Virginia Tech economics major, questions experts assembled for the tour about forests and floods, continuing the queries until she better understands why the country still has a long way to go in protecting towns from the effects of El Niño.
As dusk approaches, the van comes to a halt in front of a rebuilt home. Two rebuilding projects are underway, one directed by the government in Lima and one by teams from the University of Piura.
The university is trying to resurrect traditional building techniques, employing artisans who still know the old secrets, Agurto says. They work with bamboo, native woods, cement fashioned into bricks, and other materials.
Construction sounds play out as the students walk through the space. Workers are plastering walls with a mixture of concrete and chalk. Children and elders look on as Agurto explains that the floor plans were designed, cookie-cutter fashion, by government officials in Lima — about 500 miles away. Residents are not universally pleased at being stuffed into one-size-fits-all designs.
This is the students’ first look at people who feel they were not asked in advance for their thoughts. But Agurto makes sure the students don’t leave with wholly negative impressions. University of Piura researchers were able to introduce a measure of hope. “We realized that the floors were made from dirt, and that’s dangerous for the kids at play,” he explains. “We looked at interventions from around the world, and we found one called Piso Firme in Mexico — firm floors.”
Almost 200 concrete floors have been installed in this and nearby homes, so children now play on hygienic surfaces instead of directly on dirt, which can harbor parasites. Agurto wants the students to understand that, even when cash isn’t available to rebuild an entire town, moving ahead on smaller projects can be valuable. Playing on concrete floors makes children healthier by preventing disease: “By a simple intervention, you can save people’s lives.”
The next day brings a four-hour bus ride up the winding dirt roads into the Andes.
The driver picks his way around curves, honking to alert any oncoming vehicles. Only one vehicle at a time can maneuver, cliff side.
Almost an hour out from Chalaco, students catch sight of the Andes. Traces of pink, salmon, and fuchsia appear in the sky as dusk creeps over the mountain peaks. The students spill out of the bus to take selfies against the sunset.
Blue-black night falls as the students disembark in Chalaco, elevation 7,000 feet. They claim their assigned rooms in the small, family-run hotel and then assemble in the downstairs dining room for dinner.
Agurto informs them that tomorrow they’ll walk for an hour on a dirt mountain road to get to the village where they’ll carry out a field survey. Such are the hardships of doing academic research in the developing world.
The professor wants the students to experience life the way the people in the villages do.
A day of fieldwork
The students set out shortly after breakfast. The walk is challenging. Chunks of the concrete road leading out of town are steeper than the pitch of an A-frame roof.
The road soon turns to dirt, and the sun brings out beads of perspiration on foreheads. Students share the route with others on foot or on horseback. Some people lead burros.
The village is little more than a few houses on hillsides. Students crowd into a woman’s kitchen, sharing space with an ambling chicken. Agurto explains that the homeowner was more than willing to give up cooking over an open wood-fueled fire — a dangerous, polluting practice. She adopted a more modern stove, but the chimney didn’t work properly. The flaw is evident in black smoke-smudges that color the walls. She then accepted a government-promoted upgrade to a gas-powered stove. But gas is expensive, so the new stove is used only for quick-cooking foods. She needs help in repairing and maintaining the stove and chimney, she tells the students.
Afterward, Agurto spells it out. “The students are getting an idea of the many problems that we have in the developing world — where small solutions can help,” he says of the intended lessons of the kitchen show-and-tell. “But it’s not enough to know what to do. It’s also important to have people adopting these solutions, adopting them in the long term.”
Once again, the students are impressed with the need to listen to people for whom they intend to design products or solutions. A new stove is all but worthless if the chimney doesn’t work and smoke billows, filling the kitchen and blackening the walls.
After the tour, the students disperse in teams. Jose Luis Herrara Hinojosa, Hannah Looney, and Alessandra Nicole Hidalgo Arestegui hike up the sloping front yard belonging to Jose Naval Roman Cruz. They gather round his front door to inquire about the costs of drinking water and electricity. They quiz him about how many rooms his home has and their size.
Cruz serves his visitors coffee from beans he grew, dried, and processed, along with homemade tamales fashioned from homegrown corn. He sweetens coffee with sugar cane grown on his family’s land.
Sana Ahmad, an economics major at Virginia Tech, reflects on the excitement of meeting people and entering homes. “When you actually see it, it makes you value what you’re doing — more confident.” She appreciates learning “that what you’re studying will have application in more ways than you think.”
The students have been taking notes, planning, researching, and studying almost nonstop for days. What comes next is a brief interlude, a view of how the world looks at 10,000 feet. The big bus won’t make it up a mountain road that becomes rockier and narrower even as the air thins, so the group separates into pickup trucks and vans.
After experiencing winding roads and vegetated curves that can impart claustrophobia, everyone catches sight of vistas that spread for miles. The idyll enchants the students. Occasionally a resident of the highlands walks by. The figures recede into the horizon, as if swallowed up by an ocean or the desert. A herd of alpacas heads toward the group, as some of the students draw closer for selfies.
A Peruvian student, Martin Vargas Alvines, from the seaport of Paita, and the first in his family to go to college, looks around at the landscape and says, “I didn’t know these places existed.”
Perfecting their pitches
Back at the University of Piura, the students have two days to plan and prepare their talks.
“We are not looking for a perfect presentation, but we want to see whether the intuition is there,” Agurto says, assessing what the students have learned and how he thinks they’ll apply it. “The small taste that we are giving them about economic policy — that’s basically a chain of starting thinking about a problem. Kids have a lot of innovation and creativity, so it’s my expectation that they will surprise us.”
“The students are getting an idea of the many problems that we have in the developing world — where small solutions can help. But it’s not enough to know what to do. It’s also important to have people adopting these solutions, adopting them in the long term.”
Professor Marcos Agurto
One team tackling low-performing schools devises ways for teachers to network. Another team looks for ways that seasonal workers can find productive year-round employment.
The team of Hinojosa, Looney, and Arestegui considers a few different subjects, then settles on the problem of litter. For many towns, trash is both a visual blight and a health hazard.
As they evaluate rewards and incentives to change habits, Hinojosa thinks it would be fabulous to offer the villages a grand prize — a children’s bicycle — but in the end the team abandons that idea because even $100,000 won’t cover the costs. Also, while in the planning stages, they research the feasibility of employing prison labor.
Which ideas make it into their presentation? Enlisting community leaders and residents of 16 villages in a street-cleaning campaign. The incentives are to be bags of rice.
The moment arrives, and the three spend 20 minutes explaining their idea. The crux: A cleanup campaign would be run in all 16 villages, with half receiving the rice reward and half receiving nothing. The bulk of the budget would underwrite rice as well as trash-removal trucks. The expected outcome? Healthier livestock, less trash in the environment, and cleaner villages.
The professors ding them on a couple points. The students overestimated the number of residents who would actually take part in the project. Professor Sheryl Ball also points to the lack of a true control group. Simply withholding incentives from half the villages didn’t meet the standard. For accurate evaluation, the students should include a cohort of villages where no campaign is run.
“You always think about what could have been done better,” Looney muses later. “I’m thankful for the criticism even if it stung a little in the moment. I mean, we just put so much hard work into it. It felt worth it. I think we did a really great job.”
Agurto and Ball agree with her assessment; the team is among the highest-performing groups.
When Martin Vargas Alvines was 2 years old, his mother began teaching him to read and paint shapes like circles and triangles. His father worked in the merchant marines in Paita. Neither parent graduated from high school. His mother vowed that life would be different for her son.
Scholarships allowed him to become the first in his family to go to college and also enabled him — a fourth-year economics student — to participate in the program that joins Virginia Tech and the University of Piura. His visit to the U.S. was “a really beautiful experience,” but especially eye-opening was his new view of home.
“I didn’t know the situation,” he says of his highlands experiences. “I didn’t know how they lived here.”
Learning more about the behavioral side of economics makes him want to enlarge his career goals. “Now I have more clear ideas. I know how I can apply my knowledge,” he says. “I learned a lot about my country, the poverty in my country. I know I have to do things to help my people.”
Other students find the experience transformative as well. “At the end of the day, this was an educational experience,” Sana Ahmad says. “You just see everything you’ve been learning. It’s not just in a textbook.”
Hannah Looney, for her part, can’t get enough of travel. She has been to Africa, and she’s done study abroad in Ireland. Peru is her new sweet spot. “I love the world!” she says.
She started out looking for friendship and adventure, and she ended up learning to “consider more fields and trying to be open with my education.” She marveled at learning “how interconnected so many different fields are.” Majoring in industrial and systems engineering, she’s become more drawn to research and crafting experiments and interventions, taking a hands-on approach to problem-solving.
Jose Luis Herrara Hinojosa might have registered the biggest leap of all. The youngest of seven children, he developed more faith in his opinions as well as belief that he might become a professional whose ideas have merit. He feels like a different person, he says.
His team’s trash-abatement proposal is just one of many ideas with world-changing potential. “These are the kinds of things we can do as policy drivers and policymakers and professionals,” he says. “I have more confidence right now. Yes!”
Agurto is satisfied that the students came out of the experience enriched. “They did a good job — everybody did. It was not only about the final report, which is important, but it’s also about the full experience. It’s been a small exercise of what being a development economist is.”
How it came about: Programs and partners
Formally known as VT-UDEP Economics Lab: Experiment-Driven Policy Making in Peru, the program offers educational opportunities in behavioral and experimental economics on Virginia Tech’s Blacksburg campus as well in Lima and Piura in Peru.
The program was designed to offer students insights from behavioral and experimental economics. Behavioral and experimental economics are strengths at Virginia Tech, while field work in economics is a strength at the University of Piura.
Funding for the venture came from several sources, including Virginia Tech’s Center for Instructional Development and Educational Research and the Global Education Office, part of Outreach and International Affairs, as well as a $25,000 grant from the 100,000 Strong in the Americas Innovation Fund, part of the nonprofit Partners of The Americas.
To earn the grant, Virginia Tech and the University of Piura pledged to reach low-income and underserved students from rural communities in the U.S. and Peru and offer not only language anintercultural learning but also exposure to STEM subjects on a global scale.
— ANDREA BRUNAIS