For real? Income and non-income effects of cash transfers on the demand for food
Stephan Dietrich () and
Georg Schmerzeck ()
Additional contact information
Stephan Dietrich: UNU-MERIT, Maastricht University
Georg Schmerzeck: UNU-MERIT, Maastricht University
No 2020-006, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)
Cash transfers have become a key policy tool to protect vulnerable populations from malnutrition. Ample evidence shows these programs to have positive impacts on nominal food consumption expenditure. However, with rising food prices, nominal impacts might systematically differ from real impacts. We analyze the effects of Kenyas Hunger Safety Net Program on food demand during a drastic price shock. We find that the impact on nominal food expenditures overstates the impact measured at constant prices. Two factors explain this result: Firstly, households spend most of the transfer on food irrespective of prices, thus increasing losses due to the price shock in absolute terms. Secondly, shifting expenditure towards food categories more strongly affected by the price shock leads to disproportional real losses among treated households. Structural changes in demand associated with transfer modalities account for up to half of the loss in real food expenditures compared to control households.
Keywords: Cash transfers; Food prices; Demand; Social protection; Kenya (search for similar items in EconPapers)
JEL-codes: D12 I38 O12 Q11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr and nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2020006
Access Statistics for this paper
More papers in MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) Contact information at EDIRC.
Bibliographic data for series maintained by Ad Notten ().