Template-type: ReDIF-Paper 1.0
Author-Name: Dietrich, Stephan
Author-Email: dietrich@merit.unu.edu
Author-Workplace-Name: UNU-MERIT, Maastricht University
Author-Name: Schmerzeck, Georg
Author-Email: g.schmerzeck@maastrichtuniversity.nl
Author-Workplace-Name: UNU-MERIT, Maastricht University
Title: For real? Income and non-income effects of cash transfers on the demand
	 for food.
Abstract: Cash transfers have become a key policy tool to protect vulnerable 
	 populations from malnutrition. Ample evidence shows these programs to 
	 have positive impacts on nominal food consumption expenditure. However, 
	 with rising food prices, nominal impacts might systematically differ 
	 from real impacts. We analyze the effects of Kenyas Hunger Safety Net 
	 Program on food demand during a drastic price shock. We find that the 
	 impact on nominal food expenditures overstates the impact measured at 
	 constant prices. Two factors explain this result: Firstly, households 
	 spend most of the transfer on food irrespective of prices, thus 
	 increasing losses due to the price shock in absolute terms. Secondly, 
	 shifting expenditure towards food categories more strongly affected by 
	 the price shock leads to disproportional real losses among treated 
	 households. Structural changes in demand associated with transfer 
	 modalities account for up to half of the loss in real food expenditures 
	 compared to control households.
Classification-JEL: D12, I38, O12, Q11
Keywords: Cash transfers, Food prices, Demand, Social protection, Kenya
Series: UNU-MERIT Working Papers
Creation-Date: 20200205
Number: 2020-006
File-URL: https://unu-merit.nl/publications/wppdf/2020/wp2020-006.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2020006