The Freedom to Choose: Theory and Quasi-Experimental Evidence on Cash Transfer Restrictions

Jade Siu, Olivier Sterck and Cory Rodgers

No 2021-14, CSAE Working Paper Series from Centre for the Study of African Economies, University of Oxford

Abstract: Should cash transfer programmes restrict consumer choice? For example, should food assistance delivered in cash be restricted to food and exclude temptation goods? Theoretically, if transfers are extra-marginal, restrictions induce (1) a substitution effect away from restricted goods and (2) a negative wealth effect if transfer recipients resell unrestricted goods at a loss to access restricted goods. The welfare impact on transfer recipients is negative. We test and corroborate these predictions by exploiting a natural experiment in a refugee settlement in Kenya, where some refugees receive monthly cash transfers restricted to food while others get unrestricted cash transfers.

Keywords: Cash transfers; Vouchers; Restrictions; Debt (search for similar items in EconPapers)
JEL-codes: G51 I38 O12 O15 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-dev and nep-exp
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://ora.ox.ac.uk/objects/uuid:0c5facdb-1ee1-42ed-9a7a-4e3bb5577f29 (application/pdf)

Related works:
Journal Article: The freedom to choose: Theory and quasi-experimental evidence on cash transfer restrictions (2023)
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: https://EconPapers.repec.org/RePEc:csa:wpaper:2021-14

Access Statistics for this paper

More papers in CSAE Working Paper Series from Centre for the Study of African Economies, University of Oxford Contact information at EDIRC.
Bibliographic data for series maintained by Julia Coffey ().