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Testing Paternalism: Cash versus In-Kind Transfers

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  • Jesse M. Cunha

Abstract

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, using a randomized controlled trial of Mexico's food assistance program. In relation to total food consumption, the in-kind transfer was infra-marginal and nondistorting. However, the transfer contained ten food items, and there was large variation in the extent to which individual foods were extra-marginal and distorting. Small differences in the nutritional intake of women and children under in-kind transfers did not lead to meaningful differential improvements in health outcomes compared to cash.

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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Journal: Applied Economics.

Volume (Year): 6 (2014)
Issue (Month): 2 (April)
Pages: 195-230

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Handle: RePEc:aea:aejapp:v:6:y:2014:i:2:p:195-230

Note: DOI: 10.1257/app.6.2.195
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