CashorIn-Kind,ElectronicorManual
Transfers?
EvidencefromFieldExperimentsinWestand
CentralAfrica
JennyC.Aker,Tu.sUniversityandIFPRI
JPALSEAPolicyConferenceonSocialProtecAon
Jakarta,Indonesia
January12,2016
JennyC.Aker Cash,In-Kind,Electronic,Manual
Mo@va@on
•  Howshouldsociety(donors,governmentsand
NGOs)redistributetothepoor?
•  Cashtransferprogramsareanincreasinglyimportant
partofsocialprotecAonprogramsinbothdeveloped
anddevelopingcountries
•  YetmanysocialprotecAonprogramsaresAll“inkind”
•  Foodaid,foodstamps,medicines,inputs,vouchers
•  Especiallyinlower-incomeandconflictcountries
JennyC.Aker Cash,In-Kind,Electronic,Manual
Mo@va@on
•  Ifprogramrecipientswouldweaklypreferanequalvaluedcashtransfertoanin-kindtransfer,whynotuse
cash?
•  Cashmightnotbethepreferredmodalityfor
redistribuAngwealth
•
•
•
•
TargeAng
Localsupply
PoliAcalfeasibility
“Paternalism”
•  SubstanAalevidenceoftheimpactofeachmodality,but
limitedevidenceoftherela%veeffectsofeachmodality
o  Recentstudiesoncashversusin-kindtransfers(GenAlini2014,
Cunha2014,Hidroboetal2014,Hoddino]etal2014)
JennyC.Aker Cash,In-Kind,Electronic,Manual
Mo@va@on
•  Regardlessofthemodality,socialprotecAon
programspresentlogisAcal,operaAonalandsecurity
challenges
•  Thiscanreducethe(cost)effec%venessofsocial
protecAonprograms
o  ItcanalsoresultinsubstanAaldirectandindirectcoststo
programrecipients.
JennyC.Aker Cash,In-Kind,Electronic,Manual
ResearchGoals
ResearchQues@ons
•  WhataretherelaAveeffectsofdifferenttransfer
modali@es(cashversusin-kind)onhousehold
purchases,consumpAonandwell-being?
o  WhatisthecosteffecAvenessofeachmodality?
•  Howdoesthetransferdeliverymechanism(physical
versuselectronic)affectthecostsofimplemenAng
suchtransfers?
o  ArethereanyaddiAonalbenefitsfrom
“cashless”(electronic)?
•  Tworandomizedcontroltrials(DRCandNiger)
JennyC.Aker Cash,In-Kind,Electronic,Manual
SocialProtec@onInterven@ons:DRC
•  ImplementedbyConcernWorldwideinacampfor
internallydisplacedpersons(IDPs)
•  US$130transferprovidedinthreeinstallments
betweenSeptember2011andMarch2012
•  ProvidedtoincreaseassetaccumulaAon(NFIs)and
meetfoodneeds
JennyC.Aker Cash,In-Kind,Electronic,Manual
JennyC.Aker Cash,In-Kind,Electronic,Manual
ResearchDesign
•  474householdswererandomlyassignedtooneoftwo
transfermodaliAes
•  T1:Uncondi@onalcashtransfer.Cashtransfersprovided
inthreeinstallments
•  T2.Voucher.Vouchersprovidedinthreeinstallments
o  Firstvouchercouldbespentonfoodandnon-fooditemsata
“mulAsectoralfair”
o  Secondandthirdvoucherscouldonlybespentonfooditems
•  Equivalently-valuedtransfersprovidedatsameAmeand
sameamounts
•  Bothgroupshadtotraveltomainurbancenter(15km
fromcamp)topickuptheirtransfer
JennyC.Aker Cash,In-Kind,Electronic,Manual
VoucherFair
WhyVouchers?
•
•
•
•
•
EncouragingconsumpAonofparAculargoods
TargeAng
Marketsupply
PoliAcalfeasibility
Security
JennyC.Aker Cash,In-Kind,Electronic,Manual
Isthislikeothervoucherprograms?
•  Differsfrom“tradiAonal”vouchertransfersby:
•  Timing–hadtobespentinoneday
•  LocaAon–couldonlybespentatvoucherfair
(ratherthanvendors,kiosksormarketsin
differentlocaAons)
JennyC.Aker Cash,In-Kind,Electronic,Manual
Whywouldcashandvouchersdiffer?
•  Cashcanbespendonanything,whereasvouchers
could(primarily)bespentonfood
•  Ifthevalueofthevoucherismorethanthe
householdwouldhavespentotherwiseonfood,then
cashandvoucherhouseholdswillpurchasedifferent
things
o  Voucherhouseholdswillspendmoreonfoodtousethefull
valueofthetransfer
•  Ifvoucherhouseholdscannotsellthevouchers(or
whattheypurchased),thenthiswillalsotranslateinto
differencesinconsumpAon
JennyC.Aker Cash,In-Kind,Electronic,Manual
Impacts
•  Itemspurchased
•  Well-being(foodsecurity,assets,copingstrategies)
•  Costs
JennyC.Aker Cash,In-Kind,Electronic,Manual
HouseholdPurchases
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Butvoucher
householdsweremore
likelytobuyrice,salt
andfish–andbought
moreofthem!
Cashhouseholdsused
thetransfertobuy
moretypesoffood
andnon-fooditems
Voucher
Cash
HouseholdPurchases(Quan@@es)
14
Voucherhouseholds
bought6Amesmore
salt(10kgmore)than
cashhouseholds!
12
10
Voucher
8
Cash
6
4
2
0
Salt(kg)
Rice(kg)
Fish(number)
JennyC.Aker Cash,In-Kind,Electronic,Manual
Whydifferentpurchases?
•  Voucherhouseholdshadtospendthevoucheronfood
itemsatthevoucherfairtousetheenArevalueofthe
transfer
o  Thisshi.edexpensestowardsfoodsthatwereeasily
storableandeasytoresell
o  ButchoicesweresAllconstrained
Ifsomethingwastooheavy,Ididn’tbuyit…Iwantedtobuytwo
boxesofsaltbutcouldonlycarryone,soIboughtoneplusother
things.
Voucherprogramrecipient,Masisicamp
JennyC.Aker Cash,In-Kind,Electronic,Manual
DidtheTypeofTransferleadto
DifferentWell-Being?
•  Foodsecurity(householddietdiversity,numberof
mealsperday,numberofmonthsofadequate
householdfoodprovisioning)
•  Assetownershipandsavings(durableandnondurablegoodscategories)
o  Butcashhouseholdswereabletosavesomeoftheir
transfer(US$2)
•  Agriculturalassets(land,livestock)
•  Copingstrategies
JennyC.Aker Cash,In-Kind,Electronic,Manual
Whydidpurchasesdiffer…butwellbeingdidn’t?
DifferentPurchases
…ButSimilarWell-Being
•  Vouchersrestrictedto
food,andhadto
purchasethoseitemson
aspecificday
•  Voucherhouseholds
resoldsomegoods
purchased
•  Voucherhouseholdshad
lessbargainingpowervisà-vistraders–hadtopay
higherprices
•  Voucherandcash
householdsshared
goods(andcash)
JennyC.Aker Cash,In-Kind,Electronic,Manual
19
CostsperProgramRecipient
$16.00
TransferFees
AccountOpeningCosts
$14.00
VoucherprinAng
Materials(plasAcsheeAng,sAcks)
$12.00
Transport(fuel,lodging)
StaffAme
$10.00
$8.00
$6.00
VoucherprogramcostUS$3moreper
recipient
PotenAallyhighersecuritycostsfor
voucherhouseholds
$4.00
$2.00
$0.00
Cash
Voucher
JennyC.Aker Cash,In-Kind,Electronic,Manual
CashorVouchers?
•  Cashandvoucherhouseholdshadverydifferent
purchasingpa]ernsbutsimilarlevelsofwell-being
o  Differentforsomeotherstudies
•  Sincewell-beingwasthesameandcashwascheaper
toimplement,cashisthepreferredmodalityhere
o  Goodsandserviceswerereadilyavailableonthelocal
market,socashwaspossible
•  ButcostlyfortheNGOandprogramrecipients:Could
socialprotecAontransfersbeimplementedeven
morecheaply?
JennyC.Aker Cash,In-Kind,Electronic,Manual
Source:ConcernWorldwide
JennyC.Aker Cash,In-Kind,Electronic,Manual
22
JennyC.Aker Cash,In-Kind,Electronic,Manual
Source:ConcernWorldwide
JennyC.Aker Cash,In-Kind,Electronic,Manual
24
MobileMoneyServicesbyCountry
JennyC.Aker Cash,In-Kind,Electronic,Manual
JennyC.Aker Cash,In-Kind,Electronic,Manual
26
CashTransferInterven@ons:Niger
•  ImplementedbyConcernWorldwideinresponseto
2009/2010foodcrisis
•  Monthly(uncondiAonal)cashtransferof$USD45for5
months($USD225total)
o  2/3ofannualpercapitaGDP
o  Providedduringhungryseason(MaythroughSeptember)to
preventseveremalnutriAonandassetdecapitalizaAon
•  TargeAng
o  Pooresthouseholdstargeted
o  Womenreceivedthecashtransfer
JennyC.Aker Cash,In-Kind,Electronic,Manual
27
ResearchDesign
•  96villageswererandomlyassignedtooneofthree
intervenAons:
•  T1.Cash:Manualcashtransfereachmonthinthe
recipient’svillageorinanearbyvillage
•  T2.Mobile:ManualcashtransferplusZap-enabled
mobilephone
•  T3.Zap:Zap-enabledmobilephoneplusthecash
transferviamobilemoneytransfer
•  NodifferenceinAmingoftransfers
•  Valueofthephoneabout$USD5
JennyC.Aker Cash,In-Kind,Electronic,Manual
28
ResearchDesign
C. Control
T1. Cash
T2. Mobile
T3. Zap
4.0
3.5
T3-T2:AddiAonaleffectofthe
mobilemoneytransfer
approach
3.0
2.5
T2-T1:AddiAonal
effectofthemobile
phone
2.0
1.5
T1-C:Impactofthe
cashprogram
(unobserved)
1.0
0.5
0.0
Pre-program
Post-program
JennyC.Aker Cash,In-Kind,Electronic,Manual
MobileMoneyinNiger
•  Newmobilemoneytransferprogram(introducedin
January2010)
o  Fewagentsoutsideofcapitalcity
o  Li]leconsumerfamiliaritywiththeprogram
o  LimitedadopAon
•  LowmobilephonepenetraAon(30%)
•  Highilliteracyrates(85%)
•  ChallengeswithmanipulaAngmobilephonesandremembering
PINcodes
•  LimitedoperaAonalcapacityofmobilephoneservice
providerinthemobilemoneysphere
o  NeededtolinkConcern’sprogramrecipientlistswithZainZap
interface
JennyC.Aker Cash,In-Kind,Electronic,Manual
30
31
Whyshouldthisma\er?
•  ReducedcostsofobtainingtransfercanincreaseAmespent
onproducAveacAviAesandchangethelocaAonandAmingof
purchases
•  Reducedtransac@oncostsassociatedwithinformalprivate
transfershelphouseholdstobe]ercopewithshocks
•  Reducedcommunica@oncostsincreaseaccesstoinformaAon
andleadtomoreopAmaldecision-making
•  Increasedprivacyofthecashtransferleavesmoreincome
availableforthehouseholdandaffectsinvestmentstrategies
•  Increasedintra-householdbargaining:TargeAngwomencan
improvewomen’scontroloverresourcesandinvestmentin
publicgoods
JennyC.Aker Cash,In-Kind,Electronic,Manual
32
Impacts
•  Costs
•  Well-Being(FoodSecurity,Numberofmeals)
•  Mechanisms
JennyC.Aker Cash,In-Kind,Electronic,Manual
33
TotalCostofCashTransferDistribu@onProgrambyMonth
(Euros)
50000
45000
40000
Costperrecipientis$.90moreinzap
villages–
IftheprogramconAnuedforanother2
months,Zapwouldhavebeenless
expensiveperprogramrecipientthan
manualcash
35000
30000
25000
20000
15000
10000
5000
0
May
June
July
M-transfer
Aug
Sept
Manualcash
34
Cost($USD)toProgramRecipientofObtainingtheCashTransfer
2.5
2
1.5
Programrecipientsincash/placebovillageshadto
travel2km(oneway)togetthetransfer,
approximately½hour(excludingwaiAngAme)
TheAmesavingsis
equivalenttoUSD$.92
overthefive-month
period(lowerbound),or
2kgofmillet--enoughto
feedafamilyoffivefor
oneday
Thezapgrouphadto
travellessthan.5km(less
than10minutes)
1
0.5
0
Distance (km) to Cashpoint
Cash/Placebo
Distance (hours) to Cash Point
MobileMoney
35
Impacts
100%
99% 98%
90%
79%
80%
69%
70%
Zaphouseholdsweremorelikely
tobuyotherfoodstuffs
82%
(cowpeas,condiments,meatand
oil)
69%
60%
ManualCash/
Placebo
M-Transfer
51%
50%
46%
40%
37%
40%
30%
18% 18%
20%
10%
6%
0%
Grains
Cowpeas
Meat
Condiments
Oil
Seeds
5%
36
Schoolfees
FoodSecurity
50%
45%
40%
35%
30%
Householddietdiversitywas
16%higherinZap
householdsascompared 36%
withMobileandCash
households
38%
29%
29%
27%
24%
25%
20%
ChildreninZaphouseholds
ate1/3moremealperay
43%
18%
17%
15%
10%
5%
0%
Cowpea
Condiments
Cash
Zap
Mobile
Fats
37
Whyshouldthisma\er?
•  ReducedcostsofobtainingtransfercanincreaseAmespent
onproducAveacAviAesandchangethelocaAonandAmingof
purchases
•  Reducedtransac@oncostsassociatedwithinformalprivate
transfershelphouseholdstobe]ercopewithshocks
•  Reducedcommunica@oncostsincreaseaccesstoinformaAon
andleadtomoreopAmaldecision-making
•  Increasedprivacyofthecashtransferleavesmoreincome
availableforthehouseholdandaffectsinvestmentstrategies
•  Increasedintra-householdbargaining:TargeAngwomencan
improvewomen’scontroloverresourcesandinvestmentin
publicgoods
JennyC.Aker Cash,In-Kind,Electronic,Manual
38
Intra-HouseholdDecision-Making
•  Manualcashvillages:
o  Allprogramrecipients(plussomehusbands)traveledto
obtaincashtransfer
o  Majorityprovidedcashtohusbandorsonimmediatelya.er
receivingthetransfer
o  Li]leAmefordiscussiononpurchasingprioriAes
•  Zapvillages
o  Womenreceivedadiscretebeepviamobilephone
o  Informedhusbandoftransferarrivalinprivacyofhome(not
rightaway)
o  DiscussedpurchasingprioriAesathome
JennyC.Aker Cash,In-Kind,Electronic,Manual
39
Intra-HouseholdDecision-Making
•  WomeninZaphouseholdshadgreaterresponsibility
forcertainhouseholdacAviAes
o  Weremorelikelytotraveltomarketsandberesponsible
forsellinggrains
•  Zaphouseholdsspentmoreonclothingforreligious
fesAvals
JennyC.Aker Cash,In-Kind,Electronic,Manual
40
SummaryofFindings
•  MobilemoneydecreasedcostsforimplemenAngagencyand
programrecipients,butlargefixedcosts
o  PotenAallycheaperinanenvironmentwheremobilemoneyismore
well-knownandhasalargeragentnetwork
o  However,issuesaroundsensiAzaAonandPINcodesmustbe
addressed(Ghana)
•  BenefitsbeyondsimplecostreducAon
o  Increaseddiversityofpurchases,improveddietdiversity
o  HighmarginaluAlityofincome–potenAallymorevariaAonin
outcomesunderothercondiAons
•  Why?Changesinintra-householddecision-making
o  Intra-householddecision-makingisverycontextspecific
o  PotenAalotherimpactsorchannelsinthelongerterm
JennyC.Aker Cash,In-Kind,Electronic,Manual
41
PolicyConsidera@ons
•  SomeevidenceofimpactofmobilemoneyinKenyaand
RwandaandelectronictransfersinIndia,butsAllafracAon
ofwhatweneedtoknow
•  Thenecessaryinfrastructureneedstobeinplace
•  Needasupply-side(agents,plauorm)anddemandside
approach(sensiAzaAon,trust,abilitytouse)
o  Ism-moneyprofitablefortheserviceprovidersintheshortterm?Wouldotherfinancialservicesbeprofitable?
•  MobilemoneycanpotenAallypromotefinancialinclusion,
butwillnotnecessarily“banktheunbanked”
•  Savings,credit,insuranceareallpartoffinancialinclusion
•  PaymentscanpotenAally“push”take-up--butwillpeople
usetheservicesa.erthepaymentismade?
JennyC.Aker Cash,In-Kind,Electronic,Manual
42
TheBo\omLine
•  Howshouldwealthberedistributed?Cash,voucher,
in-kind?
o  Bodyofevidencesuggeststhatwhilecashismoreflexible,inkindtransferscanhelptoachievecertain(health/nutriAon)
objecAves
o  DependsupontargeAng,localsupply(availabilityandprices)
andpoliAcalfeasibility
•  Regardlessofthemodality,either“physical”or“electronic”
transferscanbeused
o  Electroniccanbecheaper,butthenecessaryinfrastructureneeds
tobeinplace(non-trivialtosetup)
o  Evenifinfrastructureexists,itcoulddisadvantagethepoor
(especiallyiftheydifficultyinusingthetechnology)
JennyC.Aker Cash,In-Kind,Electronic,Manual
43
Thankyou
44