Abstract
This study uses the odds-weighted regression approach and data from two spatially separated social cash transfer (SCT) programs in Zambia to determine the impact of cash transfers on household welfare. The same analytical framework was also applied on sub-samples of poor and relatively less poor households, where the wealth ranking was done using an asset-based index derived through principal components analysis. The results confirm positive SCT effects on per capita consumption expenditure and that the sizes and relative significance of these effects vary by program design and by the household's asset wealth. The effects were especially unambiguously positive and significant for non-food consumption. While the impact on food expenditure was positive and significant in the rural Kazungula SCT program, the impact on non-food per capita consumption expenditure was three times greater. In the urban scheme in Chipata, program impacts were only significant on non-food expenditure. Future intervention designs need to take into account such heterogeneity in level and shape of potential impacts if they are to be effective.
Highlights
Zambia has been implementing social cash transfer (SCT) schemes since 2003 with the primary aim to reduce extreme poverty among the poorest households with insufficient or no labour capacity
This paper reports the relative impact of two spatially separated SCT schemes with design variations in Zambia
The rural scheme, had as expected the poorest target group with household incomes just about a third of the levels observed in Chipata and almost half the daily number of meals taken by children
Summary
Zambia has been implementing social cash transfer (SCT) schemes since 2003 with the primary aim to reduce extreme poverty among the poorest households with insufficient or no labour capacity. This study uses survey data from two structurally different and spatially separated pilot schemes in Chipata and Kazungula Districts of Zambia to determine the impact of SCTs on household welfare. No such study has been done on the Chipata and/or Kazungula pilot schemes, both of which were modelled after Kalomo with a 10 percent selection threshold and a purely community-based targeting system. Following Tembo et al (2014), we measure aggregate effects and heterogeneous impact across household wealth strata. The results indicate significant positive aggregate effects on household welfare in both pilot districts. Food expenditure effects were unambiguously positive and significant only in the rural scheme while in the urban-based scheme of Chipata such effects were positive and significant only among asset-poor households.
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