The poverty impacts of cash and in-kind transfers: experimental evidence from rural Mexico

Emmanuel Skoufias, Mishel Unar and Teresa Gonzalez de Cossio

Journal of Development Effectiveness, 2013, vol. 5, issue 4, 401-429

Abstract: The unique experimental design of the Food Support Programme ( Programa de Apoyo Alimentario ) is used to analyse in-kind and cash transfers in the poor rural areas of southern states of Mexico. The intent-to-treat effect on poverty of cash transfers of real value 25 per cent less than the market value of in-kind transfers is identical to that of in-kind transfers. Potential explanations of this result are investigated by looking into the differences in impacts of in-kind and cash transfers on food consumption and non-food expenditures and on the allocation of family labour between agricultural and non-agricultural activities. Both in-kind and cash transfers have identically large positive impacts on food consumption. Non-food expenditures are also higher in the localities with cash transfers, whereas they remain unaffected in the localities with in-kind transfers. Both kinds of transfers have a significant impact on the time allocation of males (and not females) who switch from agricultural to non-agricultural activities. But, the availability of cash transfers has a significantly higher marginal effect than in-kind transfers on the shift towards non-agricultural activities. Overall, the findings suggest that cash transfers may be better able than in-kind transfers at mitigating the impact of market imperfections, thus increasing both equity and efficiency.

Date: 2013
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Citations: View citations in EconPapers (24)

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DOI: 10.1080/19439342.2013.843578

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