General Equilibrium Effects of Cash Transfers: Experimental Evidence from Kenya
By D. Egger, J. Haushofer, Edward Miguel, Paul Niehaus, Michael Walker. Econometrica, 2019
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How large economic stimuli generate individual and aggregate responses is a central question in economics, but has not been studied experimentally. We provided one‐time cash transfers of about USD 1000 to over 10,500 poor households across 653 randomized villages in rural Kenya. The implied fiscal shock was over 15 percent of local GDP. We find large impacts on consumption and assets for recipients. Importantly, we document large positive spillovers on non‐recipient households and firms, and minimal price inflation. We estimate a local transfer multiplier of 2.5. We interpret welfare implications through the lens of a simple household optimization framework.
Subfields: Economics and Econometrics, Gender Studies, Safety Research
View Paper: https://www.semanticscholar.org/paper/0ed7e0092c77cc7f3fc6cf2e0d56c0846c367040
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Citations in the corpus
- Poverty, depression, and anxiety: Causal evidence and mechanisms (2020, background): “Many of the randomized interventions described in the previous section had no detectable effect on physical health even as they reduced mental illness (36, 38, 56).”