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Using referenda to improve targeting and decrease costs of conditional cash transfers

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  • Alix-Garcia, Jennifer M.
  • Sims, Katharine R.E.
  • Phaneuf, Daniel J.

Abstract

Cost-effective allocation of conditional cash transfers (CCT) requires identifying recipients with low opportunity costs who might change behavior. This paper develops a low-cost approach for improving program implementation by using a stated preference, referendum-style survey question to calculate willingness to accept (WTA) for CCT contracts. We illustrate this in the context of Mexico's Payments for Ecosystem Services Program, and find that the estimated social cost based on WTA is substantially lower than actual payments. Simulation of three geographic targeting approaches shows that joint selection using deforestation risk and WTA could increase program impact under the same budget. We also simulate modified payment schedules based on predicted WTA and demonstrate that these could reduce program cost.

Suggested Citation

  • Alix-Garcia, Jennifer M. & Sims, Katharine R.E. & Phaneuf, Daniel J., 2019. "Using referenda to improve targeting and decrease costs of conditional cash transfers," Journal of Public Economics, Elsevier, vol. 176(C), pages 179-194.
    • Handle: RePEc:eee:pubeco:v:176:y:2019:i:c:p:179-194
    DOI: 10.1016/j.jpubeco.2019.06.001
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    More about this item

    Keywords

    Targeting; Conditional cash transfers; Payments for ecosystem services; Stated preference;
    All these keywords.

    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation

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