Economics at your fingertips  

It's all in the timing: Cash transfers and consumption smoothing in a developing country

Samuel Bazzi, Sudarno Sumarto () and Asep Suryahadi

Journal of Economic Behavior & Organization, 2015, vol. 119, issue C, 267-288

Abstract: We use a large-scale unconditional cash transfer program in Indonesia to investigate the importance of timing in shaping household consumption responses to fiscal interventions. Timely receipt of transfers yields no expenditure change relative to non-recipients. However, delayed receipt reduces expenditures by 7.5 percentage points. Ignoring heterogeneous timing leads to sizable underestimates of expenditure impacts. After considering several data-driven explanations, we reconcile these findings with models of consumption smoothing in which liquidity constraints imply asymmetric responses to positive and negative shocks. Our results parallel findings on government transfers in rich countries and yield new implications for program evaluation.

Keywords: Cash transfers; Marginal propensity to consume; Liquidity constraints; Program evaluation (search for similar items in EconPapers)
JEL-codes: D91 D12 I38 O12 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2019-10-18
Handle: RePEc:eee:jeborg:v:119:y:2015:i:c:p:267-288