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American Economic Journal: Applied Economics: Vol. 6 No. 2 (April 2014)

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Testing Paternalism: Cash versus In-Kind Transfers

Article Citation

Cunha, Jesse M. 2014. "Testing Paternalism: Cash versus In-Kind Transfers." American Economic Journal: Applied Economics, 6(2): 195-230.

DOI: 10.1257/app.6.2.195

Abstract

Welfare programs are often implemented in-kind to promote outcomes that might not be realized under cash transfers. This paper tests whether such paternalistically motivated transfers are justified compared to cash, using a randomized controlled trial of Mexico's food assistance program. In relation to total food consumption, the in-kind transfer was infra-marginal and nondistorting. However, the transfer contained ten food items, and there was large variation in the extent to which individual foods were extra-marginal and distorting. Small differences in the nutritional intake of women and children under in-kind transfers did not lead to meaningful differential improvements in health outcomes compared to cash.

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Online Appendix (256.24 KB) | Download Data Set (39.61 MB) | Author Disclosure Statement(s) (109.66 KB)

Authors

Cunha, Jesse M. (US Naval Postgraduate School)

JEL Classifications

I14: Health and Inequality
I18: Health: Government Policy; Regulation; Public Health
I38: Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
O15: Economic Development: Human Resources; Human Development; Income Distribution; Migration

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