The Effects of Cash and In-Kind Transfer by Religious Organizations on Muslim Households’ Expenditure: Indonesian Family Life Survey 2014

The unique experimental design of the Food Support Programme (Programa de Apoyo Alimentario) is used to analyse in-kind and cash transfers in the poor rural areas of southern states of Mexico. The intent-to-treat effect on poverty of cash transfers of real value 25 per cent less than the market value of in-kind transfers is identical to that of in-kind transfers. Potential explanations of this result are investigated by looking into the differences in impacts of in-kind and cash transfers on food consumption and non-food expenditures and on the allocation of family labour between agricultural and non-agricultural activities. Both in-kind and cash transfers have identically large positive impacts on food consumption. Non-food expenditures are also higher in the localities with cash transfers, whereas they remain unaffected in the localities with in-kind transfers. Both kinds of transfers have a significant impact on the time allocation of males (and not females) who switch from agricultural to non-agricultural activities. But, the availability of cash transfers has a significantly higher marginal effect than in-kind transfers on the shift towards non-agricultural activities. Overall, the findings suggest that cash transfers may be better able than in-kind transfers at mitigating the impact of market imperfections, thus increasing both equity and efficiency.

Economists have frequently argued that cash transfers are to be preferred to in-kind transfers. However, the argument is strictly true only where there are no market failures, and there are several arguments in favour of in-kind transfers that are valid in these circumstances In-kind transfers are often used where policy may be specifically concerned with the welfare of the recipient but a cash transfer cannot be made directly to the intended recipient. This might be the case with basic health care and education services for children where cash transfers would have to be made via the parents who might choose to spend such cash in a different fashion. This is called the agency problem. A second argument relates to the desire to exploit the stigma associated with visibly being in receipt of some transfer, in order to improve the targeting of such transfers to the most needy. This may be most relevant where recorded income may not be a good indicator of well-being such as may be the case in an economy with a large underground. The essence of this argument is that only the genuinely poor find it worthwhile to participate in the programme if it is stigmatised. In order to encourage only the poorest to select themselves into the programme the quality of the in-kind provision may have to be low: if the quality is a normal characteristic of a good then few of the richest will participate if the quality is low since they prefer a higher quality at the market price. Both of these arguments suggest that an in-kind transfer is not valued as highly as cash by the recipients: in the first case because the agent cannot trade the transfer for cash from which rent could be extracted; and in the second case because the value of the transfer is net of the costs of the stigma. The fact that in-kind transfers are worth less than cash but worth more to the poor than to the rich, offers the attractive prospect of being able to both relieve poverty and improve work incentives. In fact, in-kind transfers seem to be most prevalent in welfare schemes for those out-of-work while cash transfers are most commonly used for those in-work. At the same time as improving work incentives and improving the targeting of expenditure to alleviate poverty, in-kind transfers may be able to protect the welfare of children in poor households from adverse shocks associated with variations in parental income. Indeed, this is precisely why many such schemes were introduced. However, if family members are altruistic towards each other then there is the prospect that an in-kind transfer directly to one household member may be offset by some countervailing action by other household members. This so-called rotten-kid phenomenon severely undermines the case for in-kind transfers to children - if such transfers can be neutralised by some corresponding intra-household reallocation then not only is the affect on child welfare undermined but so too is the potential beneficial work incentive effect since the benefit of the transfer to the child could be appropriated by the parent. This paper is concerned with the effect of three UK nutrition programmes (free school lunches, school milk and welfare milk) on the household expenditure on milk and (non-milk) food. The aim of the paper is to estimate the extent to which households offset these in-kind transfers by reducing corresponding expenditures. Thus, the paper addresses the issue of the extent to which dependent children and parents are altruistically linked as well as the more conventional issue of the extent to which in-kind transfers are equivalent to cash. Our analysis is based on detailed modelling of the determinants of household expenditures and shows that households do offset these in-kind transfers - the effect is small for free school lunches suggesting that the agency problem may be small, but is large for the two milk schemes suggesting altruism is quite strong. The policy lesson is that in-kind transfers may not be desirable because agency is not a big problem and will typically not be effective unless what is being transferred would not typically be bought (a low quality school lunch for example).

Humanitarian organizations, mandated with responding to emergencies, generally provide food assistance via in-kind and/or cash transfers. Although cash and in-kind transfers have had varying effects across different regions, the superiority of one over the other has been debated. This study considers a mixed strategy that includes both cash and in-kind transfer in the presence of finite budget, given a slow-onset disaster such as famine or drought. Importantly, it proposes an evidence-based framework based on the given data. Specifically, a two-stage stochastic program with recourse is proposed, where uncertainty stems from the slow-onset disaster that has non-uniform impact across a given geographical region. The proposed program is first used to study the slow-onset disaster situation in Kenya, and then to evaluate the performance of the cash versus in-kind transfer programs. We also solved larger size problem instances using the sample average approximation (SAA) algorithm, and the resulting analyses underscore the deductions of the case study that although cash transfer is more efficient than in-kind transfer, however, the latter is inevitable due to local unavailability of certain commodities.

The Price Effects of Cash versus In-Kind Transfers

The impact of premium subsidies on health plan choices in Switzerland: Who responds to the incentives set by in-kind as opposed to cash transfers?

Cash transfers take different forms -- unconditional or conditional. Higher- and middle-income Kenyans support the poor through cash and in-kind transfers. These private/individual transfers supplement the Government’s own cash and in-kind transfer programmes. Non-profit institutions and corporate sector are also involved in cash and in-kind transfers. However, some policy makers and others are skeptical about the viability of unconditional cash transfer programmes. They fear that poor households will use such cash transfers to buy alcohol, tobacco, or other “temptation goods.”This paper aims at: establishing the determinants of the items on which unconditional cash transfers are spent at the household level; determining if the concern often expressed by policy makers and others that poor households will use cash transfers to buy the so called “temptation goods” is justified; and determining if a case can be made for unconditional cash transfer in Kenya. We employed a multivariate regression technique to establish the determinants of cash transfer expenditures, using nationally representative household survey data. Our findings show that unconditional cash transfers are spent on food, education/school fees, health, investment/business, rent/housing, clothing, debt repayment, and others. Overall, households in Kenya seem to make “sensible” decisions in their expenditure of such income. They spend the money on items that are in line with their socioeconomic situation. The highest proportion of such income is spent on education which they consider as investment in human capital of their children. Next is expenditure on food and the pattern is consistent with our prior expectations. Expenditures on the so called “temptation goods” seem to be very small, if at all. These key priority expenditure patterns seem to invalidate the concern that cash transfers may be just “handouts” that promote purchase of the so-called “temptation goods” in addition to leading to dependency. Factors that influence how the recipients spend the cash include the household’s poverty severity rating, food poverty rating, location (urban or rural), nutritional status and gender and education level of head of household.In light of the above findings, when planning and executing government’s social protection programmes, the recipients should be given greater say than has been the case hitherto. During the disruptive times, there are opportunities for innovation in policy formulation and management of cash transfer programmes, especially the unconditional ones. The Government, donors, corporate and NGO sectors should be open to such innovations and the beneficiaries should be given lee-way in deciding how to spend the money, especially in disruptive times. This would improve effectiveness and sustainability of such programmes. Keywords: Cash transfer, multivariate regression, E-Views, pooled panel data DOI: 10.7176/JESD/13-4-05 Publication date: February 28 th 2022

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.

This article examines the effect of cash versus in-kind transfers on local prices. Both types of transfers increase the demand for normal goods; in-kind transfers also increase supply in recipient communities, which could lead to lower prices than under cash transfers. We test and confirm this prediction using a programme in Mexico that randomly assigned villages to receive boxes of food (trucked into the village), equivalently-valued cash transfers, or no transfers. We find that prices are significantly lower under in-kind transfers compared to cash transfers; relative to the control group, in-kind transfers cause a 4% fall in prices while cash transfers cause a positive but negligible increase in prices. In the more economically developed villages in the sample, households' purchasing power is only modestly affected by these price effects. In the less developed villages, the price effects are much larger in magnitude, which we show is due to these villages being less tied to the outside economy and having less competition among local suppliers.

Social spending in Croatia is mainly based on social protection, public healthcare and education policies. There are two forms of investing in children through the social spending provided by central and local governments: cash and in-kind transfers. This paper describes the impacts of such social spending on households with children in Croatia and its capital, Zagreb. Making use of a microsimulation model, the income distribution of cash and in-kind transfers and their impacts on poverty and inequality are assessed. Compared to cash transfers, in-kind transfers, including local government subsidies, are relatively evenly distributed, income independent, and thus roughly equally important for the entire population. Their value greatly exceeds that of monetary transfers. Results demonstrate the progressive effect of transfers in kind on income distribution by reducing income inequality and poverty. This research seeks to emphasise the importance of using augmented income in the analysis of income inequality and poverty, instead of solely monetary disposable income.

In-kind transfers, cash grants and labor supply

ABSTRACTThis article aims to estimate the elasticity of taxable income (ETI), taking into account the nature of transfers and their use as a redistribution package (involving cash and in-kind transfers) to households in Brazil. Our contributions are twofold. First, we provide a simple model with balanced-budget government that reveals the role played by cash and in-kind transfers on the labour supply (and income tax revenues thereof). Next, in order to estimate ETI in the presence of cash and in-kind transfers, Brazilian population surveys (Pesquisa Nacional por Amostra de Domicílios [PNAD]) are used to explore a limited tax reform that was implemented between 1997 and 1998. This reform only affected the higher income tax bracket. Our findings suggest that in-kind (cash) transfers are positively (negatively) associated with reported taxable income and precise estimation of ETI requires estimates of both types of transfers. Last, we estimate the ETI for Brazil in the range from 0.4 to 1.3 not different from those that maximize income tax revenues.

Welfare Effects of an In-kind Transfer Program: Evidence from Mexico

PurposeSince the last decade, debates regarding the efficiency and effectiveness of the forms of transfer, i.e. in the form of in-kind or cash transfers, have been gaining momentum. This paper aims to explore the preferences revealed by the beneficiaries, the role of contextual conditions in moulding these preferences, factors associated with the transfer scheme that defines the preferences and the rationale behind such responses.Design/methodology/approachThe study conducted involves primary data collected from an Indian state, Odisha. 308 beneficiaries of the Targeted Public Distribution System (TPDS) were interviewed concerning specific objectives in a rural district (Mayurbhanj) and another highly urbanised district (Khordha).FindingsThe comparative results show that the strength of the contextual conditions significantly influences the preferences of the beneficiaries in the rural district as compared to the effect on the beneficiaries of the urban district. Education seems to have an insignificant impact in rural areas. However, income and standard of living have positive significant effects on shaping the preferences for cash or in-kind transfers.Originality/valueExamining the strength of the contextual conditions and emphasising beneficiaries' perspectives would stimulate a better understanding of the implementation of the proposed quasi-Universal Basic Income. The study would hence, be instrumental in dealing with the transition towards cash transfers in the Indian context where the co-responsibility of both stakeholders, the government and the beneficiaries, should be given equal weightage.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-03-2023-0158

Child Labor Under Cash and In-Kind Transfers: Evidence from Rural Mexico

Cash and In-Kind Transfers in Poor Rural Communities in Mexico Increase Household Fruit, Vegetable, and Micronutrient Consumption but Also Lead to Excess Energy Consumption1–3