The Price Effects of Cash Versus In-Kind Transfers

Giacomo De Giorgi, Seema Jayachandran and Jesse Cunha

No 8581, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper compares how cash and in-kind transfers affect local prices. Both types of transfers increase the demand for normal goods, but only in-kind transfers also increase supply. Hence, in-kind transfers should lead to lower prices than cash transfers, which helps consumers at the expense of local producers. We test and confirm this prediction using a program in Mexico that randomly assigned villages to receive boxes of food (trucked into the village), equivalently-valued cash transfers, or no transfers. The pecuniary benefit to consumers of in-kind transfers, relative to cash transfers, equals 11% of the direct transfer.

Keywords: Cash and in-kind transfers; Prices (search for similar items in EconPapers)
JEL-codes: D4 O12 (search for similar items in EconPapers)
Date: 2011-09
New Economics Papers: this item is included in nep-agr, nep-dev and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (43)

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Related works:
Journal Article: The Price Effects of Cash Versus In-Kind Transfers (2019)
Working Paper: The price effects of cash versus in-kind transfers (2015)
Working Paper: The Price Effects of Cash Versus In-Kind Transfers (2011)
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