cash, food, or vouchers? evidence from a four-country experimental study | ifpri-wfp event

Cash, Food or Vouchers? Evidence from a Four-Country Experimental Study

October 23, 2013

John Hoddinott

(in collaboration with Daniel Gilligan, Melissa Hidrobo, Amy Margolies, Amber Peterman, Shalini Roy, Susanna Sandström, Benjamin Schwab, Joanna Upton)

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Introduction

What do we know about the relative advantages and drawback of providing assistance in the form of food or cash in developing countries?

Very little.

There are many informative studies of food transfers and of cash transfers but there are no compelling studies that directly compare the impacts of food

and cash in the same setting.There is limited information on relative costs

Often this issue is dominated by ideology and politics

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Introduction

• How can we answer this question in a compelling fashion?– In the same setting, implement transfers keeping all aspects of the intervention the

same …• Value of transfers• Frequency of transfers• Payment dates

– … except for the modality (cash, food, voucher) …– which is randomly assigned …– so that differences in impacts can be ascribed to modality and NOT to other

confounding factors …

– And do this in a variety of settings

• Today we report back on the results of a three year IFPRI-WFP study that does just that

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Structure of presentation

• Describe the interventions

• Explain the evaluation design

• Describe core findings:– Impacts– Costs

• Briefly note additional findings

• Summary and implications

INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE 5

INTERVENTIONS

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Ecuador

• Unconditional transfers in urban areas in northern provinces of Carchi and Sucumbíos with large concentration of Colombian refugees

• Beneficiaries randomized at neighborhood level to receive:– $40 cash transfers that were accessed from ATMs using a debit card– $40 in vouchers redeemable for specified foods in supermarkets– $40 in food: rice (24 kg), vegetable oil (4ℓ), lentils (8 kg), and canned

sardines (8 cans of 0.425 kg)

• Transfers received monthly for a six month period

• All beneficiaries receive nutrition sensitization

• Roughly 75% of beneficiaries were women

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Niger

• Three months public works (all households) and three months unconditional transfers (targeted households) in Mirriah departement, Zinder region

• Beneficiaries randomized at worksite level to receive:– Cash payment of 25000 FCFA ($55) per month. Cash dispensed from mobile

ATM brought into each village– In-kind payment of 87.5kg cereals, 18kg of pulses and 3.5 kg vegetable oil and

salt. Food shipped into villages at beginning of public works and stored in granary.

– Payments every two weeks during public works; monthly for unconditional transfers

• Transfers made to household head– approx 75% male; 25% female

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Uganda

• Transfers linked to children’s enrollment in Early Childhood Development centers (preschools) in three districts of Karamoja – a poor, rugged, post-conflict sub-region in Eastern Uganda with high seasonal food insecurity

• For each child aged 3-5 years enrolled in preschool, beneficiaries were randomized (at preschool level) to receive:– 25,500 UGX ($10.25) in cash: added electronically to mobile money cards– 25,500 UGX worth of food: multiple-micronutrient fortified corn soya blend

(CSB), Vitamin-A fortified oil, sugar– No transfer (control group)

• Transfers received every six-eight weeks for 12 months (6 transfer cycles)

• Transfers made preferentially to the child’s mother

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Yemen

• Unconditional transfers in rural districts of two governorates with high baseline levels of food insecurity.

• Randomization at the Food Distribution Point (FDP) level– Each FDP is a school serving a cluster of neighboring villages

• 3 transfers each:– Cash Transfer: 10500 YER (≈$49)

• every two months beginning in Nov 2011– Food Transfer: 50kg of fortified wheat flour, 5ℓ of oil

• Aug 2011, Oct 2011 & April 2012

• Beneficiaries: 19% female headed households

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EVALUATION DESIGN

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Evaluation design: Core questions addressed in all countries

Ecuador Niger Uganda Yemen

How do benefits of cash(vouchers) compare to food transfers?

Y Y Y Y

Does the delivery of cash(vouchers) cost less than food transfers?

Y Y Y Y

HH preferences for modality

Y Y Y Y

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Impact of household food security: Two Measures

• WFP’s principal food security indicator, Food Consumption Score (FCS)

• FCS = (# times food group consumed in last seven days)x (weight attached to food group)

GroupFood items

Food group Weight

1

Maize, rice, sorghum, millet, pasta, bread , other cereals

Staples 2Cassava, potatoes and sweet potatoes, other tubers, plantains

2 Beans, peas, lentils, groundnuts and cashew nuts Pulses 3

3 Vegetables Vegetables 1

4 Fruit Fruit 1

5 Beef, goat, poultry, pork, eggs, and fish Meat and fish 4

6 Milk, yogurt, and other dairy Dairy 4

7 Sugar, sugar products, and honey Sugars 0.5

8 Oils, fats, and butter Fats and oils 0.5

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Impact of household food security: Two Measures

• Households are considered food insecure if FCS < 35 (28 in Yemen) and have poor food security status if FCS < 21. At baseline, percentage of hh food insecure ranged from 10% (Ecuador) to 53% (Uganda)

• In Ecuador, Uganda, and Yemen we fielded food consumption modules that recorded details of quantities consumed over the seven days prior to the survey. This allows us to calculate a second food security measure, household caloric acquisition

• While FCS and caloric acquisition can increase together:– Caloric acquisition can rise without much change in FCS (eg increased

consumption of quantities of staples)– FCS can change without much change in caloric acquisition (eg increased

consumption of vegetables)

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Additional questions addressed in some countries

How does receipt of cash(voucher) affect

Ecuador Niger Uganda Yemen

Intra-household decisionmaking

Y

Economic and social relations between households

Y Y

Who is selected to receive transfers

Y

Anemia Y Y

Child anthropometric status Y

ECD outcomes Y

Purchase of agricultural inputs

Y

Expenditures on undesirable goods

Y Y

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Evaluation design

• Note that in Ecuador and Uganda, the intervention design consists of treatment groups (hh getting a transfer) and a control group (hh not getting a transfer), we can answer two questions:

– Impact of each modality relative to no transfer and– Impact of cash(vouchers) relative to food

• In Niger and Yemen, the intervention design consists only of treatment groups (hh getting a transfer), we can answer one question:

– Impact of cash relative to food

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RESULTS

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Impact of transfers relative to control households: Change in FCS score

Ecuador food Ecuador, cash Ecuador, vouchers Uganda, food Uganda, cash0

1

2

3

4

5

6

7

8

9

10

4.95

5.75

9.04

0

3

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Impact of transfers relative to control households:Percent change in caloric acquisition

Ecuador, food Ecuador, cash Ecuador, vouchers Uganda, food Uganda, cash0.0

5.0

10.0

15.0

20.0

25.0

16.0

6.0

11.0

1.7

19.6

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Impact of cash transfers relative to food:Percentage change in FCS

Niger, post-harvest season

Niger, hungry season

Ecuador, cash Ecuador, vouchers

Yemen Uganda

-15

-10

-5

0

5

10

15

-11-9.6

0.6

5.6

9.210.1

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Impact of cash transfers relative to food:Percent change in caloric acquisition

Ecuador, cash Ecuador, vouchers Yemen Uganda

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

-10.0

-5.0-4.0

17.9

Niger: Cash transfers likely to have increased caloric acquisition relative to food

Costing transfer modalities

• Exclude value of transfer itself. (But we return to this later)

• Focus on modality specific costs (staff time, goods, services) that are specific to the delivery modality chosen:– Food: Staff and monetary costs associated with in-country transport, ration

preparation and distribution– Cash: Costs associated with contract preparation; cost of debit cards; bank fees for

administering transfers– Vouchers: Costs associated with supermarket selection; printing vouchers; staff costs

associated with liquidating vouchers

• Common costs that are incurred in program implementation (planning costs, targeting, sensitization, nutrition training etc) are allocated proportionately across modalities or are excluded.

How much does it cost to make a cash transfer relative to a food transfer?

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Dollar cost of a cash transfer relative to a food transfer

Ecuador Niger Uganda Yemen Ecuador, voucher

-30.00

-25.00

-20.00

-15.00

-10.00

-5.00

0.00

5.00

-8.47 -8.91

-2.96

-6.28-8.20

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Costing transfer modalities: Implications

• In Niger, the monthly transfer was worth $55– The modality specific cost of a cash transfer was $4.00– The modality specific cost of a food transfer was $12.91

• It costs $354.00 to make six cash transfers to a beneficiary household$354.00 = 6 x ($55 + $4.00)

• It costs $407.46 to make six food transfers to a beneficiary household$407.46 = 6 x ($55 + $12.91)

• Abstracting from other costs, with a $2,000,000 budget, we could include:– 5,649 households if cash were given ($2,000,000 / $354.00)– 4,908 households if food were given ($2,000,000 / $407.46)

• By switching from food to cash, you could include another 741 households or 5,041 people (average household size is 6.8)

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Number of additional beneficiaries gained by switching from food to cash transfers

Ecuador Niger Uganda Yemen Total0

5000

10000

15000

20000

25000

30000

35000

4841 5041

13858

9062

32802

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Costing transfer modalities: Final comments

• Our approach assumes that if WFP transfers $40 in cash or a food basket worth $40 that the cost of the transfer itself to WFP is $40

• We obtained detailed data on procurement costs for the commodities used in the Ecuador, Uganda and Yemen. On average, this assumption is reasonable, though there is some variation across countries– Cost of acquiring food basket exceeded transfer value in Ecuador, were equal in

Uganda, was slightly less in Yemen

• With further experience and some standardization of procedures, modality specific cash costs could fall substantially.– Eg, cost of delivering cash transfers was 6% of transfer value in Niger

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ADDITIONAL RESULTS

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Preferences for food, cash and vouchers(Percent)

Ecuador, f

ood

Ecuador, c

ash

Ecuador, v

oucher

Niger, food

Niger, cash

Uganda, food

Uganda, cash

Yemen, food

Yemen, cash

0

10

20

30

40

50

60

70

80

90

55

7 8

73

50

1 0

35

127

77

20

3

16

8 6

49

79

18

2

56

all food all cash all voucher

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Additional Results• Nutrition, Uganda

– Stunting/wasting: No robust impacts of cash or of food transfers– Anemia: food transfers have no impact; cash transfers reduced anemia among preschool

children in target age groups

• Nutrition, Ecuador– Anemia: neither food , cash or vouchers had any effect on anemia

• Other results– Virtually no evidence that beneficiaries sell their food rations (all countries)– No meaningful evidence that cash transfers are used for undesirable purposes such as

buying beer (Uganda) or qat (Yemen)– No evidence that different modalities have differential impacts on intra-household

decisionmaking or on social tensions between host and refugee communities (Ecuador)– Cash transfers improved child cognitive development across several domains (Uganda)– Households receiving cash were more likely to both incur and pay off debts (Niger)– Differences in private costs of obtaining transfers reflected program decisions regarding

placement of payment points (all countries)

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SUMMARY

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Summary

1) Across a range of interventions in a variety of settings, cash transfers generally but not always proved more effective in improving WFP’s core food security indicator – FCS – at significantly less cost

2) We found little evidence that cash had adverse impacts as measured by creation of social tensions, changes in intra-household decisionmaking, or purchase of intoxicants

3) This does NOT imply that cash is always “better” than food

4) Policy and intervention design discussions need to shift from their current ideological and political focus to one that emphasizes

– Greater precision in intervention objectives– More nuanced understanding of context– Greater emphasis on costing