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Cash vs In-Kind Transfers: Indian Data Meets Theory

Author

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  • Reetika Khera

    (Institute of Economic Growth, New Delhi.)

Abstract

This paper uses qualitative and quantitative data from a survey of over 1,200 rural households in nine Indian states, along with secondary data, to shed light on the arguments for and against cash and in-kind (in this case, food) transfers. Respondents were asked to think about, argue, and ‘choose’ between the two options. Overall, two-thirds of the respondents expressed a preference for food. Some of the arguments respondents make in favour of their choices echo existing theory (e.g., paternalism, fungibility) while others are not necessarily discussed in existing theoretical work (e.g., self-control, transition costs). The quantitative analysis also highlights the context specificity of what is the appropriate form of government intervention. In that sense, this paper contributes to the growing evidence that the answer to such policy choices ultimately depends on the context.

Suggested Citation

  • Reetika Khera, 2013. "Cash vs In-Kind Transfers: Indian Data Meets Theory," IEG Working Papers 325, Institute of Economic Growth.
    • Handle: RePEc:awe:wpaper:325
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    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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