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Costing alternative transfer modalities

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  • Amy Margolies
  • John Hoddinott

Abstract

Discussions regarding the merits of cash and food transfers focus on their relative impacts. Much less is known about their relative costs. Activity-based costing methods are applied to interventions situated in Ecuador, Niger, Uganda, and Yemen, finding that the per-transfer cost of providing cash is always less than food. Given the budget for these interventions, an additional 44,769 people could have received assistance at no additional cost had cash been provided instead of food. This suggests a significant opportunity cost in terms of reduced coverage when higher cost transfer modalities are used. Decisions to use cash or food transfers should consider both impacts and costs.

Suggested Citation

  • Amy Margolies & John Hoddinott, 2015. "Costing alternative transfer modalities," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 7(1), pages 1-16, March.
    • Handle: RePEc:taf:jdevef:v:7:y:2015:i:1:p:1-16
    DOI: 10.1080/19439342.2014.984745
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    1. Benjamin Schwab, 2020. "In the Form of Bread? A Randomized Comparison of Cash and Food Transfers in Yemen," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(1), pages 91-113, January.
    2. Tagliati, Federico, 2022. "Welfare effects of an in-kind transfer program: Evidence from Mexico," Journal of Development Economics, Elsevier, vol. 154(C).
    3. Hirvonen, Kalle & Hoddinott, John F., 2018. "Payment modality preferences: Evidence from Ethiopia’s Productive Safety Net Programme," ESSP working papers 125, International Food Policy Research Institute (IFPRI).
    4. De Matteis, Alessandro & Ellis, Frank & Valdes, Ivan, 2017. "The relevance of market prices for the design of transfer programs in response to food insecurity," The Quarterly Review of Economics and Finance, Elsevier, vol. 66(C), pages 202-211.
    5. Sudha Narayanan & Shree Saha, 2020. "Take home rations (THR) and cash transfers for maternal and child nutrition: A Synthesis of evidence in India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2020-039, Indira Gandhi Institute of Development Research, Mumbai, India.
    6. Doyle, Mary-Alice & Schurer, Stefanie & Silburn, Sven, 2022. "Unintended consequences of welfare reform: Evidence from birthweight of Aboriginal children in Australia," Journal of Health Economics, Elsevier, vol. 84(C).
    7. Leight, Jessica & Gentilini, Ugo, 2025. "Cash, food, and vouchers: An overview of the evidence," Other briefs 177186, International Food Policy Research Institute (IFPRI).
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    9. World Bank Group, 2016. "Cash Transfers in Humanitarian Contexts," World Bank Publications - Reports 24699, The World Bank Group.
    10. Gentilini, Ugo, 2014. "Our daily bread : what is the evidence on comparing cash versus food transfers?," The Social Policy and Labor Discussion Paper Series 89502, The World Bank.
    11. Marta Kozicka & Regine Weber & Matthias Kalkuhl, 2019. "Cash vs. in-kind transfers: the role of self-targeting in reforming the Indian food subsidy program," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 11(4), pages 915-927, August.
    12. Muhammad Ahsan Rana & Muhammad Nadeem Malik, 2021. "Friendly Fire: Wheat Subsidy in Punjab, Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 60(2), pages 153-174.
    13. Lara Cockx & Nathalie Francken, 2016. "Evolution and impact of EU aid for food and nutrition security: a review," Working Papers of LICOS - Centre for Institutions and Economic Performance 572519, KU Leuven, Faculty of Economics and Business (FEB), LICOS - Centre for Institutions and Economic Performance.
    14. Hirvonen,Kalle Valtteri & Hoddinott,John, 2020. "Beneficiary Views on Cash and In-Kind Payments : Evidence from Ethiopia's Productive Safety," Policy Research Working Paper Series 9125, The World Bank.
    15. Anjani Kumar & Shinoj Parappurathu & Suresh C. Babu & P. K. Joshi, 2017. "Can better governance improve food security? An assessment of the public food distribution system in Odisha, India," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 9(6), pages 1433-1445, December.
    16. Ana Maria Buller & Amber Peterman & Meghna Ranganathan & Alexandra Bleile & Melissa Hidrobo & Lori Heise, 2018. "A Mixed-Method Review of Cash Transfers and Intimate Partner Violence in Low- and Middle-Income Countries," The World Bank Research Observer, World Bank, vol. 33(2), pages 218-258.
    17. Alessandro De Matteis & Fethiye Burcu Turkmen Ceylan & Bereket Kebede, 2021. "Market resilience in times of crisis: The case of Darfur," Review of Development Economics, Wiley Blackwell, vol. 25(3), pages 1107-1127, August.
    18. Upton Joanna, 2018. "Working Paper 304 - The Use of Cash Versus Food Transfers in Eastern Niger," Working Paper Series 2430, African Development Bank.

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