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The Comparative Impact of Cash Transfers and a Psychotherapy Program on Psychological and Economic Well-being

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  • Haushofer, Johannes

    (Department of Economics, Stockholm University and)

  • Mudida, Robert

    (Strathmore Business School)

  • Shapiro, Jeremy

    (Busara Center for Behavioral Economics)

Abstract

We study the economic and psychological effects of a USD 1076 PPP unconditional cash transfer, a five-week psychotherapy program, and the combination of both interventions among 5,756 individuals in rural Kenya. One year after the interventions, cash transfer recipients had higher consumption, asset holdings, and revenue, as well as higher levels of psychological well-being than control households. In contrast, the psychotherapy program had no measurable effects on either psychological or economic outcomes, both for individuals with poor mental health at baseline and others. The effects of the combined treatment are similar to those of the cash transfer alone.

Suggested Citation

  • Haushofer, Johannes & Mudida, Robert & Shapiro, Jeremy, 2021. "The Comparative Impact of Cash Transfers and a Psychotherapy Program on Psychological and Economic Well-being," Working Paper Series 1377, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:1377
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    3. Amaral, Sofia & Dinarte-Diaz, Lelys & Dominguez, Patricio & Perez-Vincent, Santiago M., 2024. "Helping families help themselves: The (Un)intended impacts of a digital parenting program," Journal of Development Economics, Elsevier, vol. 166(C).
    4. Christopher Roth & Peter Schwardmann & Egon Tripodi, 2024. "Misperceived Effectiveness and the Demand for Psychotherapy," Rationality and Competition Discussion Paper Series 500, CRC TRR 190 Rationality and Competition.
    5. Bau, Natalie & Khanna, Gaurav & Low, Corinne & Shah, Manisha & Sharmin, Sreyashi & Voena, Alessandra, 2022. "Women’s well-being during a pandemic and its containment," Journal of Development Economics, Elsevier, vol. 156(C).
    6. Michael Vlassopoulos & Abu Siddique & Tabassum Rahman & Debayan Pakrashi & Asad Islam & Firoz Ahmed, 2024. "Improving Women's Mental Health during a Pandemic," American Economic Journal: Applied Economics, American Economic Association, vol. 16(2), pages 422-455, April.
    7. Brian Gill & others, "undated". "In COVID-19 Health Messaging, Loss Framing Increases Anxiety with Little-to-No Concomitant Benefits: Experimental Evidence from 84 Countries," Mathematica Policy Research Reports ac30d0619fd64793b2e1b108d, Mathematica Policy Research.
    8. Michelle Acampora & Francesco Capozza & Vahid Moghani, 2022. "Mental Health Literacy, Beliefs and Demand for Mental Health Support among University Students," Tinbergen Institute Discussion Papers 22-079/I, Tinbergen Institute.
    9. Nathan Barker & Gharad Bryan & Dean Karlan & Angela Ofori-Atta & Christopher Udry, 2022. "Cognitive Behavioral Therapy among Ghana's Rural Poor Is Effective Regardless of Baseline Mental Distress," American Economic Review: Insights, American Economic Association, vol. 4(4), pages 527-545, December.
    10. Calderone, Margherita & Fiala, Nathan & Melyoki, Lemayon Lemilia & Schoofs, Annekathrin & Steinacher, Rachel, 2022. "Making intense skills training work at scale: Evidence on business and labor market outcomes in Tanzania," Ruhr Economic Papers 950, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    11. Andersen, Asbjørn G. & Kotsadam, Andreas & Somville, Vincent, 2022. "Material resources and well-being — Evidence from an Ethiopian housing lottery," Journal of Health Economics, Elsevier, vol. 83(C).
    12. Dominguez-Viera, Marcos E. & van den Berg, Marrit & Handgraaf, Michel & Donovan, Jason, 2023. "Influence of poverty concerns on demand for healthier processed foods: A field experiment in Mexico City," Economics & Human Biology, Elsevier, vol. 49(C).
    13. Hidrobo, Melissa & Karachiwalla, Naureen & Roy, Shalini, 2023. "The impacts of cash transfers on mental health and investments: Experimental evidence from Mali," Journal of Economic Behavior & Organization, Elsevier, vol. 216(C), pages 608-630.
    14. Matías Mrejen & Rudi Rocha, 2021. "Hiring Mental Health Professionals: Evidence from a Large-Scale Primary Care Policy in Brazil," Institutional Studies 03, Instituto de Estudos para Políticas de Saúde.
    15. Siddique, Abu & Islam, Asad & Mozumder, Tanvir Ahmed & Rahman, Tabassum & Shatil, Tanvir, 2022. "Forced Displacement, Mental Health, and Child Development: Evidence from the Rohingya Refugees," SocArXiv b4fc7, Center for Open Science.
    16. McGuire, Joel & Kaiser, Caspar & Bach-Mortensen, Anders, 2020. "The impact of cash transfers on subjective well-being and mental health in low- and middle- income countries: A systematic review and meta-analysis," SocArXiv ydr54, Center for Open Science.
    17. Dorison, Charles A & Lerner, Jennifer S & Heller, Blake H & Rothman, Alexander J & Kawachi, Ichiro I & Wang, Ke & Rees, Vaughan W & Gill, Brian P & Gibbs, Nancy & Ebersole, Charles R & Vally, Zahir & , 2022. "In COVID-19 health messaging, loss framing increases anxiety with little-to-no concomitant benefits : Experimental evidence from 84 countries," Other publications TiSEM 235f67b6-6be5-4061-8693-3, Tilburg University, School of Economics and Management.

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    More about this item

    Keywords

    Unconditional cash transfers; Psychotherapy; Randomized experiment;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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