Testing Paternalism: Cash vs. In-kind Transfers
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Authors
Cunha, Jesse M.
Subjects
in-kind transfers
paternalism
food expenditure
consumption
PAL
paternalism
food expenditure
consumption
PAL
Advisors
Date of Issue
2011
Date
Publisher
Monterey, California: Naval Postgraduate School.
Language
Abstract
Welfare programs are often implemented in-kind to promote outcomes that might not be
realized under cash transfers. This paper uses a randomized controlled trial of a governmental
food assistance program to test whether this form of paternalism is necessary, comparing
precisely measured consumption and health outcomes under both in-kind food and cash transfers.
Importantly, households do not indulge in the consumption of vices when handed cash.
Furthermore, there is little evidence that the in-kind food transfer induced more food to be
consumed than did an equal-valued cash transfer. This result is partly explained by the fact
that the in-kind transfer was infra-marginal in terms of total food. However, the in-kind basket
contained 10 individual items, and these transfers indeed altered the types of food consumed
for some households. While this distorting effect of in-kind transfers must be a motivation for
paternalism, households receiving cash consumed different, but equally nutritious foods. Finally,
there were few differences in child nutritional intakes, and no differences in child height,
weight, sickness, or anemia prevalence. While other justifications for in-kind transfers may
certainly apply, there is minimal evidence supporting the paternalistic one in this context.
Type
Article
Description
Series/Report No
Department
Graduate School of Business & Public Policy (GSBPP)
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This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.