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Jenny C. Aker, Tufts University IFPRI November 7, 2013 Jenny C. Aker Cash or Vouchers? The Relative Impacts of Cash and Vouchers in the Democratic Republic of Congo Cash and Vouchers in DRC

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Cash or Vouchers: The Relative Impacts of Cash and Vouchers in the Democratic Republic of Congo

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Page 1: 11.07.2013 - Jenny Aker

Jenny C. Aker, Tufts UniversityIFPRI

November 7, 2013

Jenny C. Aker

Cash or Vouchers?The Relative Impacts of Cash and Vouchers in

the Democratic Republic of Congo

Cash and Vouchers in DRC

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• How should society (donors, governments and NGOs) redistribute to the poor?

• Cash transfer programs are an increasingly important part of social protection programs in both developed and developing countries

• Majority of welfare transfers are still “in-kind” Food aid, food stamps, medicines, inputs, vouchersEspecially in developing (conflict) countries

Motivation

Jenny C. Aker Cash and Vouchers in DRC

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In-Kind _x000d_(Local/Re-gional Purchase)

Vouchers Cash Transfers0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

79.0%

9.0%12.0%

44.0%

14.0%

42.0%

% of USAID Emergency Food Security Program Budget

2011_x000d_Total: $232 mil-lion

2012_x000d_Total: $374 mil-lion

Type of Assistance

% o

f EFS

P Bu

dget

Source: Congressional Research Service, 2013Jenny C. Aker Cash and Vouchers in DRC

International Cash and In-Kind Transfers

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• If program recipients would weakly prefer an equal-valued cash transfer to an in-kind transfer, why not use cash?

• Cash might not be the preferred modality for redistributing wealthTargeting Local supplyPolitical feasibility “Paternalism”

• Little evidence of the relative effects of each modality in developing countries

Motivation

Jenny C. Aker Cash and Vouchers in DRC

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Jenny C. Aker Cash and Vouchers in DRC

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Jenny C. Aker Cash and Vouchers in DRC

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Research Goals

• What are the relative effects of cash versus in-kind transfers (vouchers) on household purchases, consumption and other measures of well-being?

• Households randomly assigned to equal-valued cash or voucher transferNo pure comparison group

• Assess impact on purchasing decisions, consumption, other indicators of well-being

• Investigate mechanisms• Calculate the cost-effectiveness of each modality

Research Questions

Jenny C. Aker Cash and Vouchers in DRC

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• Starkly different purchasing patterns between the two modalitiesVoucher transfer extra-marginal for some food items

• Few differential effects on other outcomes (food security, food expenditures, assets, coping strategies)Cash households were able to save more of their transfer

• Different purchases primarily due to program design, but voucher could be resold

• Costs of voucher program higher for implementing agency (and potentially program recipients)

Jenny C. Aker Cash and Vouchers in DRC

Preview of Findings

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• In-kind transfers Food stamps in the US (Moffitt 1989, Fraker et al 1995,

Whitmore 2002, Hoynes and Schazenbach 2009)• Unconditional cash transfers

Increased food consumption (Hoddindott and Skoufias 2004, Attanasio and Mesnard 2005, Maluccio 2007), improved child health (Gertler 2004)

• Conditional versus unconditional cash transfers (Baird et al 2011)

• Cash versus food transfers (Del Ninno and Dorosh 2003, Ahmed et al 2009, Cunha 2012, Hoddinott et al 2013, Gilligan et al 2013)

• Cash, food and vouchers (Hidrobo et al 2012)Jenny C. Aker Cash and Vouchers in DRC

Related Literature

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• Civil war since the 1990s “Africa’s world war” Over three million people killed Peace deal in 2003, but continued fighting and millions internally

displaced (1.7 million as of July 2011)• Internally displaced populations live in host communities and/or

camps Few income-generating opportunities, little access to basic needs International organizations provide in-kind transfers (seeds and tools,

non-food items, vouchers) and cash (primarily cash-for-work)• Limited investment in basic infrastructure (roads, power, landlines,

mobile phones) Markets still function (three markets within a 20-km radius of the camp)

Democratic Republic of Congo

Jenny C. Aker Cash and Vouchers in DRC

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• Implemented by Concern Worldwide in one informal camp (Bushani) All households in the camp eligible for the transferTransfer provided to the woman within the household

• US$130 transfer provided in three installments between September 2011 and March 2012US$90 provided in September 2011, US$20 provided in

October 2011 and US$20 in March 2012Provided to increase asset accumulation (NFIs) and meet

food needsAll households had to travel to Masisi (3 hours’ walk) to

obtain their transferJenny C. Aker Cash and Vouchers in DRC

Transfer Program

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Bushani Camp

Masisi

Nyabiondo

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• 474 households stratified by neighborhood and randomly assigned to one of two transfer modalities

• T1: Unconditional cash transfer. Cash transfers provided in three installments

• T2. Voucher. Vouchers provided in three installments First voucher could be spent on food and non-food items at a

“multisectoral fair” Second and third vouchers could only be spent on food items

• Equivalently-valued transfers provided at same time and same amounts

• Both groups had to travel to main urban center (Masisi, 15 km from camp) to pick up their transfer

• Voucher households informed of the restriction in advance• No pure comparison group

Research Design

Jenny C. Aker Cash and Vouchers in DRC

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Voucher Fair

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• First voucher fair: Included over 122 vendors and four primary schools in the area, and provided access to NFIs, household items, clothes, school fees, agricultural inputs (seeds and tools), and small animals.

• Second and third voucher fairs: Vouchers could be spent on food at “open markets”, whereby program recipients could circulate freely among pre-arranged boutiques and kiosks. o Vouchers could not be used to purchase meat and

condiments.

Voucher Fair

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• Paternalism• Targeting• Market supply• Political feasibility• Security

Why Vouchers?

Jenny C. Aker Cash and Vouchers in DRC

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• Paternalism• Targeting• Market supply• Political feasibility• Security

Why Vouchers?

Jenny C. Aker Cash and Vouchers in DRC

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• Design similar to other voucher programs in humanitarian contexts

• Differs from “traditional” voucher transfers by:• Timing – had to be spent in one day• Location – could only be spent at voucher fair

(rather than vendors, kiosks or marketes in different locations)

External Validity

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qNFI

qFood

A

B

Theoretical Framework

Jenny C. Aker Cash and Vouchers in DRC

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qNFI

qFood

A

B

A’

B’

T/pFood

Jenny C. Aker Cash and Vouchers in DRC

Cash Transfer

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qNFI

qFood

A

B

A’

B’

qF=T/pFood

A’’

Voucher with no resale

Jenny C. Aker Cash and Vouchers in DRC

B’: Voucher is infra-marginal

A’’: Voucher is extra-marginal and binding

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qNFI

qFood

A

B

A’

B’

qF=T/pFood

A’’

A’’’

A’’: Voucher is extra-marginal and binding

B’: Voucher is infra-marginal

A’’’: Voucher is extra-marginal and non-binding

Voucher with resale

Jenny C. Aker Cash and Vouchers in DRC

Can also affect preferences and make

the goods more substitutable

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• If transfers are extra-marginal, then there should be differential effects of cash and vouchers on household purchases

• If vouchers are binding, then there should be differential effects of cash and vouchers on consumption

• But would these differences lead to improved well-being?

Theoretical Predictions

Jenny C. Aker Cash and Vouchers in DRC

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Data

• Panel survey of 250 households over three rounds (September 2011, November 2011 and March 2012)Data on uses of transfer, assets, income sources, food

securityNo full expenditure or consumption module but income and

food expenditures from the previous weekExtensive margin of purchases for each transfer, and

quantities purchased for subset of goods• Price data for 40 products on the primary market and

voucher fairs• Exit surveys from voucher fairs and cash transfer recipients

on purchases• Cost data for each transfer modality 25Jenny C. Aker Cash and Vouchers in DRC

Data

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Project Timeline

26

Year February March April May June July August September October November December

2011 

      Design program

Identify program

recipients and assign household

sBaseline survey

First cash transfer and

voucher (multisector

al fair)

Second cash

transfer and

voucher distributio

n (food fair)

 

Midterm survey

Monitor voucher fairs, prices, security situation

2012  Third cash transfer

and voucher

distribution  

 Final household

survey  

   

           

     

   

Project Timeline

Jenny C. Aker Cash and Vouchers in DRC

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Project Timeline

Jenny C. Aker Cash and Vouchers in DRC

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Table 1. Comparison of Pre-Program Characteristics

Variables Voucher Cash p-value

Mean (s.d.) Mean (s.d.)

Panel A: Socio-Demographic Characteristics

Household size 5.40 5.55 0.314

(2.00) (1.85)

Number of children (less than 15 years of age) 3.23 3.21 0.888

(1.87) (1.58)

Program recipient is married 0.69 0.78 0.285

(0.42) (0.42)

Program recipient is widowed 0.21 0.15 0.272

(0.35) (0.41)

Age of program recipient 34.15 34.87 0.503

(14.19) (13.12)

Program recipient has some education 0.50 0.48 0.767

(0.50) (0.50)

Program recipient born in Masisi Territory 0.96 0.87 0.04**

(0.19) (0.33)

Number of years living in the camp 1.53 1.42 0.867

  (0.76) (0.82)  

Jenny C. Aker Cash and Vouchers in DRC

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Table 1. Comparison of Pre-Program CharacteristicsVariables Voucher Cash p-valuePanel B: Income and Income SourcesNumber of income sources 1.73 1.82 0.345

(0.72) (0.93)Total income earned during the past week (Congolese Franc) 2387 2491 0.885

(4610) (4863)Value of food purchases in the past week (Congolese Franc) 1883 1729  (4531) (1536) 0.678Panel C: Agricultural Production and LivestockHad access to land 0.02 0.02 0.863

(0.15) (0.13)Owned poultry 0.02 0.04 0.284  (0.12) (0.20)  Panel D: Asset OwnershipTotal value (USD) of assets 62.30 60.60 0.821

(24.52) (25.50)Number of durable goods categories owned 0.01 0.01 0.834

(0.09) (0.09)Number of non-durable goods categories owned 10.87 11.00 0.453  (3.58) (3.55)  Panel E: Food SecurityHousehold diet diversity score (out of 12) 2.77 3.04 0.204

(1.82) (1.67)Number of meals in last day (household 1.27 1.29 0.908

(0.58) (0.47)Number of meals eaten in last day (children) 1.29 1.29 0.885

(0.59) (0.49)Suffered from food insecurity since last harvest 0.99 0.99 0.838

(0.09) (0.09)Months of adequate food provisioning 1.57 1.86 0.042**

(1.23) (1.16)Number of observations 133 120 253

Well-balanced

Jenny C. Aker Cash and Vouchers in DRC

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• yi is outcome of household i (uses of the transfer, quantities purchased, food security and asset ownership)

• cashi is the treatment status indicator of household i

• Xi0 is vector of baseline covariates

• θN is neighborhood fixed effects (level of stratification)

• εi individual shocks or ability• Use pooled data (November and March) and control for round fixed

effects• Also control for baseline outcome variable as a robustness check

(MacKenzie 2012)• Main threats to identification: Attrition, spillovers, multiple

hypothesis-testing30Jenny C. Aker Cash and Vouchers in DRC

Empirical Strategy

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• Quantity of goods purchased by cash transfer households as compared with voucher households: Identifies whether transfer is infra- or extra-marginal

• Quantity of goods purchased versus consumed for voucher households: Identifies whether transfer is binding or non-binding

31

Are Transfers Infra- or Extra-Marginal?

Jenny C. Aker Cash and Vouchers in DRC

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2346 FC = Weekly value

of VoucherWeekly value of

voucher: 2400 FC

Cdf of weekly household food expenditures: Cash Transfer Group

Voucher infra-marginal for 50% of

households

Total Food Expenditures

Jenny C. Aker Cash and Vouchers in DRC

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Extra-marginality for

some food items

Stronger differences for

second and third transfers

Table 2: Uses of the Transfer

All Transfers Third Transfer(1) (2) (3)

Voucher Cash CashPanel A: Food Items Mean (s.d.) Coeff(s.e.) Coeff(s.e.)Number of different purchases made (last transfer) 4.94 3.07*** 4.03***

(2.75) (0.33) (0.45)

Staple grains (maize, maize flour) 0.49 0.25*** 0.25***(0.50) (0.06) (0.07)

Other grains (cassava flour, rice) 0.73 -0.12** -0.10*(0.45) (0.06) (0.08)

Beans 0.27 0.22*** 0.38***(0.45) (0.06) (0.07)

Condiments 0.15 0.27*** 0.26***(0.36) (0.05) (0.05)

Oil 0.56 0.21*** 0.27***(0.50) (0.06) (0.08)

Meat 0.03 0.65*** 0.55***(0.18) (0.04) (0.06)

Vegetables 0.08 0.36*** 0.35***(0.26) (0.05) (0.06)

Salt 0.93 -0.12** -0.12**(0.26) (0.05) (0.05)

Fish 0.45 -0.02 -0.02  (0.50) (0.08) (0.08)Panel B: Agricultural ItemsLivestock 0.09 0.05 0.08**

(0.30) (0.04) (0.03)Seeds 0.37 -0.06 0.03  (0.48) (0.06) (0.05)Panel C: Other Non-Food ItemsClothing 0.38 0.26*** 0.42***

(0.49) (0.06) (0.06)Housing Materials 0.232 0.15*** 0.11***  (0.42) -0.06 (0.03)Panel D: Education and Health ExpendituresSchool fees 0.28 0.42*** 0.64***

(0.45) (0.06) (0.06)Medicines 0.01 0.08*** 0.05*

(0.12) (0.03) (0.03)Reimburse debts 0.301 0.31*** 0.43***

(0.46) (0.06) (0.06)Observations 308 178

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Stap

le g

rain

s

Other

gra

ins

Beans Oil

Condi

men

tsMea

t

Veget

able

sSa

ltFis

h

Lives

tock

Land

(par

cel)

Seed

s

Agricu

ltura

l mat

eria

l

Hire la

bor

Pay

scho

ol fe

es

Medici

ne

Pay

debt

s

Cloth

ing

House

hold

mat

eria

l

Metal

shee

ting

Plas

tic she

etin

g0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Cash

Voucher

Uses of the Transfer (Second)

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• Among food items, salt and rice were more likely to be purchased by voucher households (for all three transfers, but stronger for second and third transfers)o Fish not statistically significant across all rounds, just

second round

• This gives a sense of the extensive margin of over-provision

• What about intensive margin of over-provision?

35Jenny C. Aker Cash and Vouchers in DRC

Are Specific Items Extra-Marginal?

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Jenny C. Aker Cash and Vouchers in DRC

Table 3: Quantities Demanded of Specific Food Items

(1) (2)

Voucher Cash

Mean (s.d.) Coeff(s.e.)

Salt (kg) 12.34 -9.97***

(18.57) (2.64)

Rice (kg) 1.77 -0.57***

(1.40) (0.18)

Fish (number) 1.75 -1.41***

(2.52) (0.32)

Number of observations 130 130

Intensive Margin of Overprovision

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• Individual welfare losses associated with overprovision can be mitigated if the transfer is non-binding

• To measure whether the transfer is binding, we want to measure the difference between purchases and consumption for extra-marginal goods

• No data on actual quantities consumed, just whether consumed

• (Given quantities of fish and salt, we could estimate daily consumption of these goods between last transfer and food recall period, assuming transfers were binding)

Jenny C. Aker Cash and Vouchers in DRC

Are the Transfers Binding?

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Data were collected 3 weeks after

each transfer, so difficult to

separate between resale,

storage or lumpy

consumption

Table 5: Food Security

All Transfers Third Transfer(1) (2) (3)

Voucher Cash CashMean (s.d.) Coeff(s.e.) Coeff(s.e.)

Panel A: Household Diet DiversityHousehold diet diversity (out of 12) 2.62 0.09 -0.07

(1.91) (0.19) (0.23)Grains 0.708 -0.02 0.02

(0.46) (0.06) (0.08)Tubers 0.736 -0.00 -0.01

(0.44) (0.06) (0.08)Beans 0.222 0.02 -0.01

(0.42) (0.05) (0.07)Vegetables 0.618 0.03 -0.01

(0.49) (0.06) (0.08)Fruits 0.041 -0.01 -0.03

(0.20) (0.03) (0.04)Fats 0.416 0.08 0.02

(0.49) (0.06) (0.08)Eggs 0 0.02 0.01

(0.00) (0.01) (0.01)Milk 0 0.00 0.00

(0.00) (0.00) (0.00)Meat 0.06 0.02 -0.03

(0.23) (0.03) (0.03)Fish 0.153 0.03 0.04

(0.36) (0.05) (0.06)Condiments 0.013 -0.01 -0.04

(0.12) (0.02) (0.03)Sugar 0.298 -0.04 -0.02  (0.46) (0.05) (0.07)

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• Food security (number of meals per day, number of months of adequate household food provisioning, food insecurity since previous harvest)

• Asset ownership and savings (durable and non-durable goods categories)

• Agricultural assets (land, livestock)• Coping strategies

Jenny C. Aker Cash and Vouchers in DRC

Did the Vouchers lead to Differential Effects on Well-Being?

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Food Security

Table 5: Food Security

All Transfers Third Transfer

(1) (2) (3)

Voucher Cash Cash

Mean (s.d.) Coeff(s.e.) Coeff(s.e.)

Panel B: Other Measures of Food Security

Number of meals per day (household) 1.41 0.01 -0.03

(0.28) (0.07) (0.10)

Number of meals per day (children) 2.12 -0.26 -0.51

(2.79) (0.31) (0.51)

Months of adequate food provisioning 2.06 0.13 0.08

(0.84) (0.09) (0.12)

Number of observations 308 178

Jenny C. Aker Cash and Vouchers in DRC

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Income and Asset OwnershipTable 5: Proxy Indicators of Well-Being

All TransfersThird Transfer

(1) (2) (3)Voucher Cash Cash

Mean (s.d.) Coeff(s.e.) Coeff(s.e.)

Panel A: Income, Expenditures and SavingsIncome in the previous week (Congolese Francs) 3,357 739 834.22

(2938.83) (639.74) (1,039.19)Amount spent on food in previous week (Congolese Francs) 2,601 -119 -336.90

(2371.64) (274.58) (373.81)Money left from transfer (Congolese Francs) 0.00 0.09*** 0.07**

(0.00) (0.03) (0.03)Amount of money remaining (savings) 0.00 1,787** 1,130**  (0.00) (704.44) (513.64)Panel B: AssetsTotal value of household assets (USD) 89.07 -1.15 0.36

(35.20) (4.53) (5.09)Number of durable assets owned 0.00 -0.01 0.01

(0.00) (0.02) (0.01)Number of non-durable assets owned 10.62 0.33 0.44

(7.03) (0.67) (0.91)Own poultry 0.1294 -0.04 -0.08

(0.34) (0.04) (0.05)Own rabbits 0.0117 0.02 0.04  (0.11) (0.02) (0.03)

Jenny C. Aker Cash and Vouchers in DRC

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Table 5: Proxy Indicators of Well-Being

All Transfers Third Transfer

(1) (2) (3)

Voucher Cash Cash

Mean (s.d.) Coeff(s.e.) Coeff(s.e.)

Panel C: Coping Strategies

Sold household goods 0.0161 -0.02 -0.01

(0.13) (0.02) (0.01)

Reduced number of meals per day 0.27419 0.03 0.07

(0.45) (0.06) (0.08)

Took children out of school 0.0161 -0.02 -0.01

(0.13) (0.02) (0.02)

Number of observations 308 178

Coping Strategies

Jenny C. Aker Cash and Vouchers in DRC

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• Different purchases in both groups – voucher households purchased more rice, salt and perhaps fishNo differential effects on individual food consumption

• Proxy indicators of well-being the same between the two groupsHowever, cash households saved some of their transfer

and reported suffering less from food insecurity

Summary

Jenny C. Aker Cash and Vouchers in DRC

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• Why did purchases differ between the two groups?• Vouchers restricted to food fairs for last two transfers

Voucher households had to purchase items in food fairs on that day (location and timing of purchases)

Voucher households would have had to pay transport costs for many (or heavy) items

• Voucher households had more (less ) bargaining power vis-à-vis traders – had to pay higher prices

• Women in voucher households had more (less) bargaining power within the household

44Jenny C. Aker Cash and Vouchers in DRC

Mechanisms

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Table 7: Mechanisms on Purchases(1) (2)

Voucher CashMean (s.d.) Coeff(s.e.)

Panel A: Location of PurchasesBoutique in camp 0.01 0.00

(0.11) (0.01)Market outside camp 0.02 0.97***

(0.12) (0.02)Masisi Center market (20 km from camp) 0.00 0.45***

(0.00) (0.08)Nyabiondo market (2 km from camp) 0.00 0.46***

(0.00) (0.08)Hospital 0.00 0.01

(0.00) (0.01)Voucher fair 0.99 -0.99***

(0.12) (0.01)School 0.00 0.01  (0.00) (0.01)Panel B: Timing of PurchasesSpent money in more than one purchase 0.013 0.77***  (0.12) (0.04)Panel C: Intra-Household Decision-Making with Respect to Transfers

Beneficiary responsible for spending all or part of transfer 0.94 -0.02(0.24) (0.03)

Husband responsible for spending transfer 0.46 -0.03(0.50) (0.06)

No one else responsible for spending transfer 0.06 -0.02(0.24) (0.03)

Discussed how to use transfer in advance with other person 0.79 -0.03(0.40) (0.05)

Number of observations 308

Jenny C. Aker Cash and Vouchers in DRC

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If something was too heavy, I didn’t buy it…I wanted to buy two boxes of salt but could only carry one, so I

bought one plus other things.Voucher program recipient, Masisi camp

Mechanisms

Jenny C. Aker Cash and Vouchers in DRC

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• Why did consumption not differ between the two groups?

• Time delay between purchases and consumption Storage or lumpy consumptionWouldn’t explain lack of difference in salt consumption

• Resale of goods purchasedAlmost all households stated that they purchased the

overprovided goods for resale

• Sharing of goods (and cash) between the two groups

47Jenny C. Aker Cash and Vouchers in DRC

Mechanisms

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Sharing of money and

goods

No differential effects on

intra-household decision-making

Jenny C. Aker Cash and Vouchers in DRC

Table 8: Mechanisms on Outcomes

(1) (2)

Voucher Cash

Mean (s.d.) Coeff(s.e.)

Panel A: Transfers are Non-Binding

Program recipient shared part of money received 0.25 0.11*

(0.44) (0.06)

Program recipient shared part of goods purchased 0.46 -0.15**

  (0.50) (0.06)

Panel C: Intra-Household Decision-Making with Respect to Transfers

Husband makes education decisions alone 0.3 0.05

(0.46) (0.06)

Husband makes agriculture decisions alone 0.26 0.05

(0.44) (0.06)

Husband decides whether to share with other households alone 0.16 0.03

(0.04) (0.06)

Husband decides whether/how to save alone 0.31 0.02

(0.47) (0.06)

Ratio of women to men's clothing 2.32 -0.08

(1.58) (0.40)

Number of observations 308

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Heterogeneous Effects

• Household size• Female-headed households• Baseline food expenditures

49

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• Differential take-up or leakage• Differential shocks• Differential price effects• Spillovers• Multiple hypothesis-testing

50Jenny C. Aker Cash and Vouchers in DRC

Threats to Identification

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Table 9: Alternative Explanations

(1) (2)

Voucher Cash

Mean (s.d.) Coeff(s.e.)

Panel A: Take Up and Leakage

Received transfer 1.00 -0.00

(0.00) (0.00)

Number of transfers received 2.98 -0.01

(0.03) (0.01)

Amount received (first two transfers) 80,825.00 1,142.94

-6042 (717.43)

Amount received (second transfer) 18,352.54 159.25

  (167.97) (229.52)

Panel B: Illness and Death

Affected by conflict 0.54 0.07

(0.05) (0.07)

Household member affected by illness 0.27 0.04

(0.05) (0.06)

Household member died 0.08 -0.00

(0.03) (0.04)

Number of observations 308

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• Impact of cash on vouchers:Cash transfers relatively small (total of 474 households and

USD$60,000 over six months, amidst IDP population of 60,000 in the area)

Purchases occurred in three different markets 15-20 km apart

Maximum prices at voucher fair were based upon recent market prices for the same goods and same market

• Impact of vouchers on cash: If vouchers increased prices, consumers could have chosen

other markets closer to the camp

52Jenny C. Aker Cash and Vouchers in DRC

Differential Price Effects

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• Spillovers Spillovers less of an issue for purchasing decisions (as

compared with other outcomes)Would be less likely to observe a difference in purchasing

decisions

• Multiple hypothesis-testing Bonferroni correction on families of outcomes (Sankoh et al

1997)Most differences remain statistically significant for extensive

margin (for cash households) and intensive margin (for voucher households)

53Jenny C. Aker Cash and Vouchers in DRC

Threats to Identification

Page 54: 11.07.2013 - Jenny Aker

• Costs to implementing agency• Costs to program recipients

54Jenny C. Aker Cash and Vouchers in DRC

Cost Effectiveness Analysis

Page 55: 11.07.2013 - Jenny Aker

Cash Voucher$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

$16.00

Transfer Fees

Account Opening Costs

Voucher printing

Materials (plastic sheeting, sticks)

Transport (fuel, lodging)

Staff time

Cost per recipient is US$3 more for the voucher program

Even if double the number of recipients per voucher fair, the voucher fair still

US$1 more

Costs per Program Recipient

Jenny C. Aker Cash and Vouchers in DRC

Page 56: 11.07.2013 - Jenny Aker

• Welfare cost (loss) to voucher recipients due to changes in purchasing decisions Mitigated by the fact that vouchers and goods could be sold

• Similar travel and opportunity costs for each modality Both groups had to travel to Masisi Center (3-4 hour walk),

but only voucher recipients had to spend there

• Potentially higher security risks for voucher recipients Had to travel and spend on particular days Goods purchased were more observable to looters and

militia than cash Specifically an issue with gender-based violence in eastern

DRCJenny C. Aker Cash and Vouchers in DRC

Cost Effectiveness Analysis

Page 57: 11.07.2013 - Jenny Aker

• Voucher changed household purchases for some goodsVoucher households purchased more salt, fish and rice than

they would have if given cashCash households purchased more diverse food items

(overall), school fees, medicines and debt reimbursement – not “temptation” goods

• No differential effects on welfareNon-binding transfers – could sell goods

• Cash transfers more cost effective

Jenny C. Aker Cash and Vouchers in DRC

Conclusions

Page 58: 11.07.2013 - Jenny Aker

• If markets can provide necessary goods, cash is a preferred option from a welfare perspectiveMight be other reasons to provide vouchers

• Environment with high marginal utility of income• But how much cash and how often?

“If we receive (a large sum) of cash all at once, I will spend it on silly things…like beer, or beers for my

friends, or cookies for the children….”Cash and voucher recipients and spouses, Masisi camp

Jenny C. Aker Cash and Vouchers in DRC

Conclusions

Page 59: 11.07.2013 - Jenny Aker

• Variety of voucher and cash-based programs in conflict and emergency situationsDRC, Sudan, Niger

• Availability of supplies on local markets and self-targeting importantPoor and vulnerable populations are easily identified with

IDPs – more difficult among host communitiesMarkets were able to provide goods

Jenny C. Aker Cash and Vouchers in DRC

External Validity