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Efficient responses to targeted cash transfers

  • Orazio Attanasio


    (Institute for Fiscal Studies and University College London)

  • Valérie Lechene


    (Institute for Fiscal Studies and University College London)

In this paper, we estimate a collective model of household consumption and test the restrictions of collective rationality using z-conditional demands in the context of a large Conditional Cash Transfer programme in rural Mexico. We show that the model is able to explain the impacts the programme has on the structure of food consumption. We use two plausible and novel distribution factors, that is variables that describe the mechanism by which decisions are reached within the household: the random allocation of a cash transfer to women, and the relative size and wealth of the husband and wife's family networks. We find that the structure we propose does better at predicting the effect of exogenous increases in household income than an alternative, unitary, structure. We cannot reject efficiency of household decisions.

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Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W13/28.

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Date of creation: 25 Oct 2013
Date of revision:
Handle: RePEc:ifs:ifsewp:13/28
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  6. 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, 06.
  7. Rosenzweig, Mark R, 1988. "Risk, Implicit Contracts and the Family in Rural Areas of Low-income Countries," Economic Journal, Royal Economic Society, vol. 98(393), pages 1148-70, December.
  8. Joseph G. Altonji & Fumio Hayashi & Laurence Kotlikoff, . "Parental Altruism and Inter Vivos Transfers: Theory and Evidence," IPR working papers 95-22, Institute for Policy Resarch at Northwestern University.
  9. Manuela Angelucci & Giacomo De Giorgi, 2009. "Indirect Effects of an Aid Program: How Do Cash Transfers Affect Ineligibles' Consumption?," American Economic Review, American Economic Association, vol. 99(1), pages 486-508, March.
  10. Manuela Angelucci & Orazio Attanasio, 2013. "The Demand for Food of Poor Urban Mexican Households: Understanding Policy Impacts Using Structural Models," American Economic Journal: Economic Policy, American Economic Association, vol. 5(1), pages 146-78, February.
  11. Emmanuel Skoufias & Vincenzo Di Maro, 2008. "Conditional Cash Transfers, Adult Work Incentives, and Poverty," Journal of Development Studies, Taylor & Francis Journals, vol. 44(7), pages 935-960.
  12. Rosenzweig, Mark R. & Stark, Oded, 1987. "Consumption Smoothing, Migration and Marriage: Evidence from Rural India," Bulletins 7515, University of Minnesota, Economic Development Center.
  13. Angelucci, Manuela & Attanasio, Orazio, 2009. "Oportunidades: Program Effect on Consumption, Low Participation, and Methodological Issues," IZA Discussion Papers 4475, Institute for the Study of Labor (IZA).
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  15. Paul J. Gertler & Sebastian W. Martinez & Marta Rubio-Codina, 2012. "Investing Cash Transfers to Raise Long-Term Living Standards," American Economic Journal: Applied Economics, American Economic Association, vol. 4(1), pages 164-92, January.
  16. Cox, Donald & Jakubson, George, 1995. "The connection between public transfers and private interfamily transfers," Journal of Public Economics, Elsevier, vol. 57(1), pages 129-167, May.
  17. La Ferrara, Eliana, 2003. "Kin Groups and Reciprocity: A Model of Credit Transactions in Ghana," CEPR Discussion Papers 3705, C.E.P.R. Discussion Papers.
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  19. Jere R. Behrman & Mark R. Rosenzweig, 2006. "Parental Wealth and Adult Children's Welfare in Marriage," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 496-509, August.
  20. 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.
  21. Linda Datcher Loury, 2006. "All in the Extended Family: Effects of Grandparents, Aunts, and Uncles on Educational Attainment," American Economic Review, American Economic Association, vol. 96(2), pages 275-278, May.
  22. T. Paul Schultz, 2001. "School Subsidies for the Poor: Evaluating the Mexican Progresa Poverty Program," Working Papers 834, Economic Growth Center, Yale University.
  23. Weiss, Yoram & Willis, Robert J, 1985. "Children as Collective Goods and Divorce Settlements," Journal of Labor Economics, University of Chicago Press, vol. 3(3), pages 268-92, July.
  24. Emmanuel Skoufias & Susan Wendy Parker, 2001. "Conditional Cash Transfers and Their Impact on Child Work and Schooling: Evidence from the PROGRESA Program in Mexico," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Fall 2001), pages 45-96, August.
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