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Unconditional cash transfers, risk attitudes and modern inputs demand

Author

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  • Prifti, Ervin

    (Food and Agriculture Organization of the United Nations, Rome, Italy)

  • Daidone, Silvio

    (Food and Agriculture Organization of the United Nations, Rome, Italy)

  • Pace, Noemi

    (Food and Agriculture Organization of the United Nations, Rome, Italy)

  • Davis, Benjamin

    (Food and Agriculture Organization of the United Nations, Rome, Italy)

Abstract

We estimate the effects of cash transfers on modern inputs demand, while isolating the role of output risk and risk preferences in channeling these effects. We use data from an RCT collected for the evaluation of Zambia’s Social Cash Transfer. We employ a moments-based method to estimate farmers’ risk attitudes from revealed preferences through production decisions and the impact of cash transfers on modern input demand. We find that the program increases demand for risk-increasing modern inputs but this does not happen as a result of a transfer-induced reduction in farmers’ risk aversion.

Suggested Citation

  • Prifti, Ervin & Daidone, Silvio & Pace, Noemi & Davis, Benjamin, 2019. "Unconditional cash transfers, risk attitudes and modern inputs demand," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 53, pages 100-118.
    • Handle: RePEc:ris:apltrx:0363
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    Cited by:

    1. Silvio Daidone & Francisco Pereira Fontes, 2023. "The role of social protection in mitigating the effects of rainfall shocks. Evidence from Ethiopia," Journal of Productivity Analysis, Springer, vol. 60(3), pages 315-332, December.
    2. Pace, Noemi & Daidone, Silvio, 2024. "Impact of development interventions on individual risk preferences: Evidence from a field-lab experiment and survey data," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 111(C).
    3. Mostafavi-Dehzooei, Mohammad H. & Heshmatpour, Masoumeh, 2024. "Cash Transfers, Time Discounting, and Agricultural Inputs Utilization in Lesotho," World Development, Elsevier, vol. 184(C).

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    More about this item

    Keywords

    cash transfers; risk attitudes; output risk; input demand; SEM; 3SLS;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • 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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