A new generation of poverty programs around the globe provides cash payments to poor and vulnerable households. Studies show that these social cash transfer programs create income and welfare benefits for poor households and the local economies where they live. However, this may come at the cost of damaging local environments if cash payments stimulate food production that conflicts with natural resource conservation. Evaluations of the economic impacts of poverty programs do not account for the welfare consequences of environmental impacts, which are potentially large for poor communities closely tied to natural resources. We use an ex-ante policy simulation tool, a bioeconomic local computable general equilibrium model parameterized with microsurvey data, to analyze the expected welfare consequences of environmental degradation caused by a cash transfer program. For a Philippine fishing community that is a net importer of fish, we show that a government cash transfer program initially increases real incomes for all households. However, increased demand for fish leads to a decline in the local fish stock that reduces program benefits. Household groups experience declines in real income benefits of 2–63%, with fishing households suffering the largest declines. Impacts on local fish stocks depend on the extent to which markets link fishing communities to outside regions through trade. Greater market integration can mitigate the fish stock decline, but this reduces the local income benefits of cash transfers.
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General Equilibrium Effects of Cash Transfers: Experimental Evidence From Kenya
How large economic stimuli generate individual and aggregate responses is a central question in economics, but has not been studied experimentally. We provided one‐time cash transfers of about USD 1000 to over 10,500 poor households across 653 randomized villages in rural Kenya. The implied fiscal shock was over 15 percent of local GDP. We find large impacts on consumption and assets for recipients. Importantly, we document large positive spillovers on non‐recipient households and firms, and minimal price inflation. We estimate a local transfer multiplier of 2.5. We interpret welfare implications through the lens of a simple household optimization framework.
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- Award ID(s):
- 1824409
- PAR ID:
- 10445626
- Date Published:
- Journal Name:
- Econometrica
- Volume:
- 90
- Issue:
- 6
- ISSN:
- 0012-9682
- Page Range / eLocation ID:
- 2603 to 2643
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
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Abstract Background Sustainable Development Goal (SDG) 7 calls for the adoption and continued use of clean-burning stoves by the 2.9 billion people relying on unclean fuels (both solid biomass and kerosene). However, to date, the clean cooking literature has found low rates of efficient stove adoption and continued use. This paper presents the application of a public health community engagement model to the use of clean cooking fuels. We implemented a pilot study with Community Technology Workers (CTWs) as a means to overcome maintenance, education, and behavioral barriers to clean fuel use in rural Tanzania.
Methods The intervention was a free 6 kg Liquified Petroleum Gas (LPG) cylinder and stove coupled with education from a local technically trained CTW on LPG use. We evaluated the training, work, and impact of a CTW on LPG use on 30 randomly selected households from two villages in a rural district of Tanzania over a 1-year period. After an initial baseline survey, technically trained local CTWs educated the households on safe LPG use and conducted 34 follow up surveys over the next year on their cooking fuel use. Additionally, we conducted qualitative interviews with all households and a focus group with six of the households.
Results The results from the mixed methods approach show that 80% of families (
n = 24) consistently refilled their LPG cylinders and ~ 40% of households exclusively used LPG. Households reported appreciating the CTWs’ visits for providing education and maintenance support, giving them confidence to use LPG safely, reminding them to save for their cylinder, and providing a community driven effort to use clean fuel.Conclusions The findings demonstrate the feasibility of this type of community infrastructure model to promote and facilitate consistent LPG use, but suggest the need to couple this local support with financial mechanisms (e.g., a microsavings program). This model could be a mechanism to increase LPG use, particularly in rural, low-income areas.
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The Earned Income Tax Credit distributes more than $60 billion to over 20 million low-income families annually. Nevertheless, an estimated one-fifth of eligible households do not claim it. We ran six preregistered, large-scale field experiments with 1 million observations to test whether “nudges” could increase EITC take-up. Despite varying the content, design, messenger, and mode of our messages, we find no evidence that they affected households’ likelihood of filing a tax return or claiming the credit. We conclude that even the most behaviorally informed low-touch outreach efforts cannot overcome the barriers faced by low-income households who do not file returns. (JEL C93, D91, H24, I38)more » « less
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- Free Publicly Accessible Full Text
-
Accepted Manuscript1.0
- Journal Article:
- https://doi.org/10.3982/ECTA17945
