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Photo of Shawn A. Cole

Unit: Finance

Contact:

(617) 495-6525

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Additional Information
  • CV
  • Working Knowledge page
  • Resources for Teaching Investing for Impact
  • The Weatherhead Center For International Affairs
  • The Center for International Development at Harvard University (CID)
  • The Abdul Latif Jameel Poverty Action Lab (J-PAL)
  • Conflict of Interest Disclosure

Areas of Interest

  • consumer finance
  • corporate finance
  • economic development
  • social enterprise
  • sustainable and impact investing

Additional Topics

  • insurance and reinsurance
  • social entrepreneurship

Industries

  • banking
  • financial services
  • microfinance

Geographies

  • Asia
  • China
  • India
  • Indonesia
  • South Africa
  • Vietnam
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Shawn A. Cole

John G. McLean Professor of Business Administration

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Shawn Cole is a professor in the Finance Unit at Harvard Business School, where he teaches and conducts research on financial services, social enterprise, and impact investing.

Much of his research examines corporate and household finance in emerging markets, with a focus on insurance, credit, and savings. He has also done extensive work on financial education in the US and emerging markets. His recent research focuses on designing and delivering advice and education over mobile phones, with an emphasis on agricultural and financial management.

He has worked in China, India, Indonesia, South Africa, and Vietnam. He is an affiliate of the National Bureau of Economic Research, and the Bureau for Research and Economic Analysis of Development. He is on the board of the Jameel Poverty Action Lab, as the co-chair for research.

At HBS, he has taught FIN1 and FIN2 in the core curriculum, Business at the Base of the Pyramid, and courses on impact investing, as well various executive education courses. He currently teaches the PhD development sequence in the department of Economics.

Before joining the Harvard Business School, Professor Cole worked at the Federal Reserve Bank of New York in the economic research department. He has served on the Boston Federal Reserve's Community Development Research Advisory Council, served as an external advisor to the Gates Foundation, and was the chair of the endowment management committee of the Telluride Association, a non-profit educational organization. He is a cofounder and board chair of a non-profit, Precision Agriculture for Development.

He received a Ph.D. in economics from the Massachusetts Institute of Technology in 2005, where he was an NSF and Javits Fellow, and an A.B. in Economics and German Literature from Cornell University. His work on insurance earned the 2015 "Shin Research Excellence Award;" in 2015 he was also named given a “Faculty Pioneer Award” from the Aspen Institute.

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Featured Work Publications Research Summary Teaching Awards & Honors
  1. The Value of Advice: Evidence from Mobile-Phone Based Agricultural Extension

    This paper evaluates the role of mobile phone-based advice in improving managerial practices of small-scale cotton farmers in Gujarat, India.  Demand for the service, “Avaaj Otalo,” is strong, even among farmers with very low levels of education. The service dramatically alters farmers information acquisition behavior, with connected farmers relying less on other farmers and agricultural input dealers. Management practices improve: we observe an increase in the adoption of more effective and less toxic pesticides, and farmers plant cumin, a profitable but risky crop, earlier in the season. Farmers appear willing to follow advice without understanding why the advice is correct: the average respondent does not demonstrate improved agricultural knowledge

  2. Do Voters Demand Responsive Governments? Evidence from Indian Disaster Relief

    Using rainfall, public relief, and election data from India, we examine how governments respond to adverse shocks and how voters react to these responses. The data show that voters punish the incumbent party for weather events beyond its control. However, fewer voters punish the ruling party when its government responds vigorously to the crisis, indicating that voters reward the government for responding to disasters. We also find evidence suggesting that voters only respond to rainfall and government relief efforts during the year immediately preceding the election. In accordance with these electoral incentives, governments appear to be more generous with disaster relief in election years.  These results describe how failures in electoral accountability can lead to suboptimal policy outcomes.

  3. Incentivizing Calculated Risk-Taking: Evidence from an Experiment with Commercial Bank Loan Officers

    This paper uses a series of experiments with commercial bank loan officers to test the effect of performance incentives on risk-assessment and lending decisions. We first show that, while high-powered incentives lead to greater screening effort and more profitable lending, their power is muted by both deferred compensation and the limited liability typically enjoyed by credit officers. Second, we present direct evidence that incentive contracts distort judgment and beliefs, even among trained professionals with many years of experience. Loans evaluated under more permissive incentive schemes are rated significantly less risky than the same loans evaluated under pay-for-performance.

In the News

27 Aug 2012
World Bank Blogs
Incentivizing Calculated Risk-Taking: an Experiment with Commercial Bank Loan Officers
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