The project analyses a microfinance program that helps the rural poor to diversify their income sources by engaging into milk-selling as an extra income generating activity. This type of intervention has been and is highly promoted by the Indian government to increase the livelihood of their deprived rural population. Besides offering a loan for the purpose of buying a cow or a buffalo, the organization provides health and life insurance for the customer and spouse, livestock insurance, as well as a set of additional non-financial services (including regular medical check-ups of the animal, training on animal husbandry, vaccinations, artificial insemination).

A household survey of just over 1,000 households was conducted at the beginning of 2008, collecting information on the household, income, assets, consumption, financial assets (savings, credit/debt, insurance) and risk. The survey was designed so as to be able to evaluate the overall program as well as the additional services offered by the institution. In addition, the survey includes a unique set of information that allows working with the subjective expectations of clients. On average a third of interview time was used to elicit probabilities on the beliefs of the respondents - beliefs about their future household income as well as two outcome variables directly related to the intervention under consideration - income from the dairy activity as well as expected health expenditures and foregone earnings in case of the animals falling ill.

Main motivation for the collection of this type of data is that expectations of prospective outcomes are a central component to models of intertemporal choice. Especially the distribution of future income has always been of major concern to economic theory and economic policy. Income and income uncertainty influence among others consumption and savings decisions, schooling decision, insurance purchase, and enrolment into welfare programs.

The importance of taking action in response to beliefs about what will happen increases in environments were future outcomes are extremely uncertain and where insurance markets are typically very imperfect.

The data will be used to get insight into the investment decision of microfinance clients - rural poor deciding to take a loan for the specific purpose of investing in a risky asset.