IDEAS home Printed from https://ideas.repec.org/a/ucp/ecdecc/doi10.1086-689575.html
   My bibliography  Save this article

Cash Transfers and Temptation Goods

Author

Listed:
  • David K. Evans
  • Anna Popova

Abstract

Cash transfers have been demonstrated to improve education and health outcomes and alleviate poverty in various contexts. However, policy makers and others often express concern that poor households will use transfers to buy alcohol, tobacco, or other “temptation goods.” The income effect of transfers will increase expenditures if alcohol and tobacco are normal goods, but this may be offset by other effects, including the substitution effect and the effect of social messaging about the appropriate use of transfers. The net effect is ambiguous. This article reviews 19 studies with quantitative evidence on the impact of cash transfers on temptation good expenditure, as well as 11 studies that surveyed whether respondents reported they used transfers to purchase temptation goods. We conduct a meta-analysis to gauge the average impact of transfers on temptation goods. Results show that on average cash transfers have a significant negative effect on total expenditures on temptation goods, equal to −0.18 standard deviations. This negative result is supported by data from Latin America, Africa, and Asia, for both conditional and unconditional cash transfer programs. A growing number of studies therefore indicate that concerns about the use of cash transfers for alcohol and tobacco are unfounded.

Suggested Citation

  • David K. Evans & Anna Popova, 2017. "Cash Transfers and Temptation Goods," Economic Development and Cultural Change, University of Chicago Press, vol. 65(2), pages 189-221.
  • Handle: RePEc:ucp:ecdecc:doi:10.1086/689575
    DOI: 10.1086/689575
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/689575
    Download Restriction: Access to the online full text or PDF requires a subscription.

    File URL: http://dx.doi.org/10.1086/689575
    Download Restriction: Access to the online full text or PDF requires a subscription.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Alex Armand, 2015. "Who wears the trousers in the family? Intra-household resource control, subjective expectations and human capital investment," NCID Working Papers 03/2015, Navarra Center for International Development, University of Navarra.
    2. Karen Macours & Norbert Schady & Renos Vakis, 2012. "Cash Transfers, Behavioral Changes, and Cognitive Development in Early Childhood: Evidence from a Randomized Experiment," American Economic Journal: Applied Economics, American Economic Association, vol. 4(2), pages 247-273, April.
    3. Kenneth F Schulz & Douglas G Altman & David Moher & for the CONSORT Group, 2010. "CONSORT 2010 Statement: Updated Guidelines for Reporting Parallel Group Randomised Trials," PLOS Medicine, Public Library of Science, vol. 7(3), pages 1-7, March.
    4. Duncan Thomas, 1990. "Intra-Household Resource Allocation: An Inferential Approach," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 635-664.
    5. Case, Anne & Deaton, Angus, 1998. "Large Cash Transfers to the Elderly in South Africa," Economic Journal, Royal Economic Society, vol. 108(450), pages 1330-1361, September.
    6. Maluccio, John A. & Flores, Rafael, 2005. "Impact evaluation of a conditional cash transfer program: the Nicaraguan Red de Protección Social," Research reports 141, International Food Policy Research Institute (IFPRI).
    7. Fiorella Benedetti & Pablo Ibarrarán & Patrick J. McEwan, 2016. "Do Education and Health Conditions Matter in a Large Cash Transfer? Evidence from a Honduran Experiment," Economic Development and Cultural Change, University of Chicago Press, vol. 64(4), pages 759-793.
    8. Ugo Gentilini, 2016. "Revisiting the "Cash versus Food" Debate: New Evidence for an Old Puzzle?," World Bank Research Observer, World Bank Group, vol. 31(1), pages 135-167.
    9. Schady, Norbert & Rosero, José, 2008. "Are cash transfers made to women spent like other sources of income?," Economics Letters, Elsevier, vol. 101(3), pages 246-248, December.
    10. Richard Akresh & Damien de Walque & Harounan Kazianga, 2014. "Alternative Cash Transfer Delivery Mechanisms: Impacts on Routine Preventative Health Clinic Visits in Burkina Faso," NBER Chapters, in: African Successes, Volume II: Human Capital, pages 113-135, National Bureau of Economic Research, Inc.
    11. Abhijit V. Banerjee & Esther Duflo, 2007. "The Economic Lives of the Poor," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 141-168, Winter.
    12. 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.
    13. David K. Evans & Stephanie Hausladen & Katrina Kosec & Natasha Reese, 2014. "Community-Based Conditional Cash Transfers in Tanzania : Results from a Randomized Trial," World Bank Publications, The World Bank, number 17220, March.
    14. Sandra L. Decker & Amy Ellen Schwartz, 2000. "Cigarettes and Alcohol: Substitutes or Complements?," NBER Working Papers 7535, National Bureau of Economic Research, Inc.
    15. Ariel Fiszbein & Norbert Schady & Francisco H.G. Ferreira & Margaret Grosh & Niall Keleher & Pedro Olinto & Emmanuel Skoufias, 2009. "Conditional Cash Transfers : Reducing Present and Future Poverty," World Bank Publications, The World Bank, number 2597, March.
    16. Gustavo J. Bobonis, 2009. "Is the Allocation of Resources within the Household Efficient? New Evidence from a Randomized Experiment," Journal of Political Economy, University of Chicago Press, vol. 117(3), pages 453-503, June.
    17. Jef L. Leroy & Marie Ruel & Ellen Verhofstadt, 2009. "The impact of conditional cash transfer programmes on child nutrition: a review of evidence using a programme theory framework," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 1(2), pages 103-129, June.
    18. repec:idb:brikps:publication-detail,7101.html?id=32886 is not listed on IDEAS
    19. Karen Macours & Norbert Schady & Renos Vakis, 2012. "Cash Transfers, Behavioral Changes, and Cognitive Development in Early Childhood: Evidence from a Randomized Experiment," American Economic Journal: Applied Economics, American Economic Association, vol. 4(2), pages 247-273, April.
    20. James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
    21. Luis H. B. Braido & Pedro Olinto & Helena Perrone, 2012. "Gender Bias in Intrahousehold Allocation: Evidence from an Unintentional Experiment," The Review of Economics and Statistics, MIT Press, vol. 94(2), pages 552-565, May.
    22. Charity Moore, 2009. "Nicaragua?s Red de Protección Social: An Exemplary but Short-Lived Conditional Cash Transfer Programme," Research Report 17, International Policy Centre for Inclusive Growth.
    23. Gilligan, Daniel O. & Roy, Shalini, 2013. "Resources, stimulation, and cognition: How transfer programs and preschool shape cognitive development in Uganda," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149822, Agricultural and Applied Economics Association.
    24. Khera, Reetika, 2014. "Cash vs. in-kind transfers: Indian data meets theory," Food Policy, Elsevier, vol. 46(C), pages 116-128.
    25. Marito Garcia & Charity M. T. Moore, 2012. "The Cash Dividend : The Rise of Cash Transfer Programs in Sub-Saharan Africa," World Bank Publications, The World Bank, number 2246, March.
    26. Evangelos Kontopantelis & David Reeves, 2010. "metaan: Random-effects meta-analysis," Stata Journal, StataCorp LP, vol. 10(3), pages 395-407, September.
    27. Michael Siam-Heng Heng & Tai Wei Lim, 2009. "Introduction," World Scientific Book Chapters, in: Destructive Creativity Of Wall Street And The East Asian Response, chapter 1, pages 1-8, World Scientific Publishing Co. Pte. Ltd..
    28. Kontopantelis, Evangelos & Reeves, David, 2010. "metaan: Random-effects meta-analysis," Stata Journal, StataCorp LP, vol. 10(3), pages 1-13.
    29. Angelucci Manuela, 2008. "Love on the Rocks: Domestic Violence and Alcohol Abuse in Rural Mexico," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-43, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Grogan, Louise, 2018. "The Labeling Effect of a Child Benefits System: Evidence from Russia 1994-2015," IZA Discussion Papers 11962, Institute of Labor Economics (IZA).
    2. Jörg Peters & Jörg Langbein & Gareth Roberts, 2018. "Generalization in the Tropics – Development Policy, Randomized Controlled Trials, and External Validity," World Bank Research Observer, World Bank Group, vol. 33(1), pages 34-64.
    3. Roelen, Keetie & Delap, Emily & Jones, Camilla & Karki Chettri, Helen, 2017. "Improving child wellbeing and care in Sub-Saharan Africa: The role of social protection," Children and Youth Services Review, Elsevier, vol. 73(C), pages 309-318.
    4. Jose Cuesta & Mario Negre & Ana Revenga & Maika Schmidt, 2018. "Tackling Income Inequality: What Works and Why?," Journal of Income Distribution, Ad libros publications inc., vol. 26(1), pages 1-48, March.
    5. Shapiro, Jeremy, 2019. "The impact of recipient choice on aid effectiveness," World Development, Elsevier, vol. 116(C), pages 137-149.
    6. Momi Dahan, 2019. "Poverty and Economic Behavior: Gambling at Social Security Paydays," CESifo Working Paper Series 7813, CESifo Group Munich.
    7. Mohammad Rasoolinejad, 2019. "Universal Basic Income: The Last Bullet in the Darkness," Papers 1910.05658, arXiv.org.
    8. Pega, Frank & Gilsanz, Paola & Kawachi, Ichiro & Wilson, Nick & Blakely, Tony, 2017. "Cumulative receipt of an anti-poverty tax credit for families did not impact tobacco smoking among parents," Social Science & Medicine, Elsevier, vol. 179(C), pages 160-165.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:ecdecc:doi:10.1086/689575. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division). General contact details of provider: https://www.journals.uchicago.edu/EDCC .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.