''Conditional Cash Transfers'': The Positive Impact On Food Consumption In Very Poor Households
12 Mar 2012
Programmes of ''conditional cash transfers'' targeted at women can give them more say in household decision-making and lead to a more than proportional increase in the share of the family budget spent on food. That is one of the findings of research by Orazio Attanasio, Erich Battistin and Alice Mesnard on the effects of Familias en Acción, a conditional cash transfer programme for very poor households in Colombia.
Their study, published in the March 2012 issue of the Economic Journal, has important implications for the design of policies aimed at improving the nutritional status of children and other poor and vulnerable individuals.
Conditional cash transfer programmes are now widely implemented in both developing and developed countries. They aim at combating poverty in two ways: first, in the short run, by giving cash transfers to households in need; and second, in the long run, by tying these transfers to certain conditions, such as sending children to school.
For a variety of reasons, including the explicit desire to improve the status of women in households that benefits from the programmes, the transfers have targeted mothers as the recipients. To improve the effectiveness of these programmes and fine-tune their design, it is important to understand whether they are having the desired effects. Such an evaluation exercise requires a good understanding of consumption patterns within the household, and how they respond to policies.
The researchers study consumption patterns among very poor households in rural Colombia. These households were targeted by the Colombian programme, which provides participants with conspicuous conditional cash transfers.
The study examines how expenditure shares and patterns change with the total resources available to households. The authors estimate such a relationship and then ask whether the patterns that they identify can explain and predict the effect that the grant provided by Familias en Acción has on expenditure patterns.
The authors start by describing the demand for food among a population of extremely poor households, a group for which consumption patterns may, a priori, differ in important ways from those of wealthier households. They find that the share of budget allocated to food decreases when total consumption increases, a pattern that has been observed for other wealthier households.
Their estimates imply that an increase in total consumption by 10% would lead to a decrease of 1% in the share of food. This suggests that even for very poor households, food is to be considered a necessity rather than a luxury. Such elasticity is relevant for the design of policies aimed at improving the nutritional status of children and other poor and vulnerable individuals.
Second, the authors find that the introduction of the programme led to an increase in total consumption of between 13% and 15%. But contrary to what the estimated consumption patterns would predict, this was not followed by a decrease in the share of food consumed by these very poor households.
The evaluation data suggest, therefore, that in addition to increasing total household consumption, such programmes change the decision process among the recipient households.
A plausible reason for such a change is the fact that conditional cash transfers target women and might change the weight they have in the decision process and, by such a mechanism, induce a more than proportional increase in food consumption.
''Food and Cash Transfers: Evidence from Colombia'' by Orazio Attanasio, Erich Battistin and Alice Mesnard is published in the March 2012 issue of the Economic Journal.
The authors are members of the Centre for the Evaluation of Development Policies (EDePo) at the Institute for Fiscal Studies. They designed the evaluation of Familias en Acción with a local research consortium, SEI, ECONOMETRIA.
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