TY  - JOUR
AU  - Cunha,Jesse M.
AU  - Giorgi,Giacomo De
AU  - Jayachandran,Seema
TI  - The Price Effects of Cash Versus In-Kind Transfers
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 17456
PY  - 2011
Y2  - September 2011
UR  - http://www.nber.org/papers/w17456
L1  - http://www.nber.org/papers/w17456.pdf
N1  - Author contact info:
Jesse Cunha
Naval Postgraduate School
Graduate School of Business
and Public Policy
555 Dyer Rd
Monterey, CA 93943
Tel: 650.492.0381
E-Mail: jcunha@nps.edu

Giacomo De Giorgi
Department of Economics
Stanford University
579 Serra Mall
Stanford, CA 94305
Tel: 650/723-3982
E-Mail: degiorgi@stanford.edu

Seema Jayachandran
Department of Economics
Northwestern University
2001 Sheridan Road
Evanston, IL 60208
Tel: (847) 491-4757
Fax: (847) 491-7001
E-Mail: seema@northwestern.edu
AB  - 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.
ER  -