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Cash Transfers, Time Discounting, and Agricultural Inputs Utilization in Lesotho

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  • Mostafavi-Dehzooei, Mohammad H.
  • Heshmatpour, Masoumeh

Abstract

Cash transfers are shown to improve production, increase investment, and induce productive practices by farmers. Despite rich literature showing these desired outcomes, little is known about the pathways that produce these impacts. We use Lesotho’s Child Grants Program, a large-scale cash transfer program, to study if cash transfers affect input utilization by farmers through their impact on intertemporal choice. We exploit the random assignment of treatment to identify the indirect and total effect of the program and to isolate the influence of the time discounting channel. We find that cash transfers make it six percentage points more likely for households to use pesticides. Based on our preferred method, eleven percent of this effect is mediated through the increase in the patience of recipients.

Suggested Citation

  • Mostafavi-Dehzooei, Mohammad H. & Heshmatpour, Masoumeh, 2024. "Cash Transfers, Time Discounting, and Agricultural Inputs Utilization in Lesotho," World Development, Elsevier, vol. 184(C).
    • Handle: RePEc:eee:wdevel:v:184:y:2024:i:c:s0305750x24002080
    DOI: 10.1016/j.worlddev.2024.106738
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    More about this item

    Keywords

    Cash transfers; Time discounting; Input use; Mediation analysis; RCT;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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