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Testing Paternalism: Cash versus In-Kind Transfers

Author

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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.

Suggested Citation

  • Jesse M. Cunha, 2014. "Testing Paternalism: Cash versus In-Kind Transfers," American Economic Journal: Applied Economics, American Economic Association, vol. 6(2), pages 195-230, April.
  • 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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    Citations

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    Cited by:

    1. Gentilini,Ugo, 2016. "The revival of the"cash versus food"debate : new evidence for an old quandary ?," Policy Research Working Paper Series 7584, The World Bank.
    2. Miller, Stephen M. & Neanidis, Kyriakos C., 2015. "Demographic transition and economic welfare: The role of in-cash and in-kind transfers," The Quarterly Review of Economics and Finance, Elsevier, vol. 58(C), pages 84-92.
    3. Gadenne, Lucie, 2018. "Do Ration Shop Systems Increase Welfare? Theory and an Application to India," The Warwick Economics Research Paper Series (TWERPS) 1149, University of Warwick, Department of Economics.
    4. Batista, Catia & Silverman, Dan & Yang, Dean, 2015. "Directed giving: Evidence from an inter-household transfer experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 118(C), pages 2-21.
    5. Alderman, Harold, 2014. "Can transfer programs be made more nutrition sensitive?:," IFPRI discussion papers 1342, International Food Policy Research Institute (IFPRI).
    6. Maoyong Fan & Zhen Lei & Gordon Liu, 2016. "Discounting of Medical Savings Accounts," American Journal of Health Economics, MIT Press, vol. 2(2), pages 161-183, Spring.
    7. repec:eee:wdevel:v:99:y:2017:i:c:p:498-517 is not listed on IDEAS
    8. World Bank Group, 2016. "Cash Transfers in Humanitarian Contexts," World Bank Other Operational Studies 24699, The World Bank.
    9. Gentilini, Ugo, 2014. "Our daily bread : what is the evidence on comparing cash versus food transfers?," Social Protection and Labor Policy and Technical Notes 89502, The World Bank.
    10. Teresa Molina Millan & Karen Macours, 2017. "Attrition in randomized control trials: Using tracking information to correct bias," NOVAFRICA Working Paper Series wp1702, Universidade Nova de Lisboa, Faculdade de Economia, NOVAFRICA.
    11. Lara Cockx & Nathalie Francken, 2016. "Evolution and Impact of EU Aid for Food and Nutrition Security: A Review," FOODSECURE Working papers 47, LEI Wageningen UR.
    12. Jesse M. Cunha & Giacomo De Giorgi & Seema Jayachandran, 2011. "The Price Effects of Cash Versus In-Kind Transfers," NBER Working Papers 17456, National Bureau of Economic Research, Inc.
    13. Aker,Jenny C., 2015. "Comparing cash and voucher transfers in a humanitarian context : evidence from the Democratic Republic of Congo," Policy Research Working Paper Series 7469, The World Bank.
    14. Gilligan, Daniel & Hidrobo, Melissa & Hoddinott, John & Roy, Shalini & Schwab, Benjamin, 2014. "Much ado about modalities: Multicountry experiments on the effects of cash and food transfers on consumption patterns," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 171159, Agricultural and Applied Economics Association.
    15. Upton, Joanna B., 2014. "Resolving the Puzzle of the Conditional Superiority of In-kind versus Cash Food Assistance: Evidence from Niger," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 172942, Agricultural and Applied Economics Association.
    16. Griffith, R. & von Hinke, S. & Smith, S., 2015. "Getting a healthy start: The effectiveness of targeted benefits for improving dietary choices," Health, Econometrics and Data Group (HEDG) Working Papers 15/10, HEDG, c/o Department of Economics, University of York.
    17. repec:eee:jhecon:v:55:y:2017:i:c:p:262-273 is not listed on IDEAS

    More about this item

    JEL classification:

    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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