Creating a Lab in the Field: Economics Experiments for Policymaking

In this article I focus on the role that lab-like field experiments (LFEs), particularly when conducted in rural areas of developing countries, play in informing policymaking. Using specific examples, I identify four main purposes of LFEs: (1) to test theories or heuristic principles; (2) to identify and estimate parameters associated with characteristics; (3) to explore the structural nature of parameters derived from empirical methods including other types of experiments; and (4) to assess methodological difficulties associated with LFEs and how these can impact parameter estimates. I address the importance of generalizability for LFEs that are intended to inform policymaking and in the process, emphasize the complementary role between LFEs and other empirical methods, in particular other experiments. Finally, I discuss 19 basic principles and eight practical aspects to keep in mind when conducting LFEs; I also suggest three future directions.