Comments and Reviews

How Much Do Non-Cash Components and Externalities Affect the Impact of Cash Transfers?

 How Much Do Non-Cash Components and Externalities Affect the Impact of Cash Transfers?

by Rafael Perez Ribas, University of Illinois at Urbana-Champaign; Fábio Veras Soares and Clarissa Teixeira, International Policy Centre for Inclusive Growth; Elydia Silva, Brazilian Development Bank (BNDES); and Guilherme Hirata, Pontifical Catholic University of Rio de Janeiro

Much of the debate about conditional cash transfer (CCT) programmes revolves around the issues of targeting and conditionalities. Despite the many impact evaluations of CCT programmes, mostly in Latin America, there is little evidence on either the effect of the cash alone or the value added by the conditionality.

 The cash component has an income effect that allows families to consume more goods and services, including healthcare and schooling. Depending on the families’ preferences, this rise in income may also lead to a change in the consumption share of goods and services. Because of non-cash components, however, there might be a substitution effect that changes the way in which households spend their income, aside from the expected changes due to the increased income. Thus the question is how these other components change household behaviour in terms of the consumption pattern.

Download: http://www.ipc-undp.org/pub/IPCOnePager111.pdf

Posted at 11:37AM Jul 14, 2010 by IPC in Social Protection and CCTs  |  Comments[0]