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Testing Paternalism: Cash versus In-Kind Transfers

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  • Jesse M. Cunha

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.

Suggested Citation

  • Jesse M. Cunha, 2014. "Testing Paternalism: Cash versus In-Kind Transfers," American Economic Journal: Applied Economics, American Economic Association, vol. 6(2), pages 195-230, April.
    • Handle: RePEc:aea:aejapp:v:6:y:2014:i:2:p:195-230
    Note: DOI: 10.1257/app.6.2.195
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    More about this item

    JEL classification:

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

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