The Impact of In-kind and Cash Transfers on Local Prices
Cunha, Jesse M.
De Giorgi, Giacomo
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Governments are often reluctant to make welfare payments to poor households in the form of unrestricted cash transfers, favouring instead in-kind transfers of goods or services, such as food aid or public housing. One rationale for making in-kind transfers is that they encourage consumption of the ‘right’ things, such as healthy food. On the flipside, cash transfers are typically less expensive to administer, and cash can provide recipients with greater freedom over purchasing choices. Another important but often overlooked aspect of this policy trade-off is that transfer programmes can affect local prices. Both cash and in-kind transfers make recipients better off, which can increase their demand for goods and, in turn, has an effect on prices. However, in-kind transfers also increase the local supply of goods, which can drive prices down. We have recently empirically measured the differential price effects of cash and in-kind transfers, and have demonstrated how they affect the recipient communities (Cunha, De Giorgi and Jayachandran, 2012).
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Cunha, Jesse M.; Giorgi, De Giacomo; Jayachandran, Seema (2013-03);This paper examines the effect of cash versus in-kind transfers on local prices. Both types of transfers increase the demand for normal goods; in-kind transfers also increase supply in recipient communities, which should ...
Cunha, Jesse M. (Monterey, California: Naval Postgraduate School., 2011);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 ...
Cunha, Jesse M. (2014-04);Welfare programs are often implemented in-kind to promote outcomes that might not be realized under cash transfers. This paper tests whether such paternalistically motivated transfers are justified compared to cash, ...