Presentation by John Hoddinott, IFPRI, at IFPRI-WFP Policy Seminar "Cash, Food, or Vouchers? Evidence from a Four-Country Study". October 23, 2013

1. 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)

2. 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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3. 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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4. Structure of presentation
• Describe the interventions
• Explain the evaluation design
• Describe core findings:
– Impacts
– Costs
• Briefly note additional findings
• Summary and implications
4

5. INTERVENTIONS
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
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6. 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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7. 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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8. Uganda
• Transfers linked to children’s enrollment in Early Childhood Development
centers (preschools) in three districts of Karamoja – a poor, rugged, postconflict 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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9. 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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10. EVALUATION DESIGN
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
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11. 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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12. 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)
Food items
Group
Food group
Weight
Maize, rice, sorghum, millet, pasta, bread , other cereals
1
Cassava, potatoes and sweet potatoes, other tubers, plantains
Staples
2
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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13. 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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14. Additional questions addressed in some countries
How does receipt of
cash(voucher) affect
Ecuador
Intra-household
decisionmaking
Y
Uganda
Yemen
Y
Economic and social relations
between households
Niger
Who is selected to receive
transfers
Y
Y
Anemia
Y
Y
Child anthropometric status
Y
ECD outcomes
Y
Purchase of agricultural
inputs
Y
Expenditures on undesirable
goods
Y
14
Y

15. 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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16. RESULTS
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
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17. Impact of transfers relative to control households:
Change in FCS score
10
9.04
9
8
7
5.75
6
5
4.95
4
3.00
3
2
1
0.00
0
Ecuador food
Ecuador, cash
17
Ecuador, vouchers
Uganda, food
Uganda, cash

18. Impact of transfers relative to control households:
Percent change in caloric acquisition
25.0
19.6
20.0
16.0
15.0
11.0
10.0
6.0
5.0
1.7
0.0
Ecuador, food
Ecuador, cash
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Ecuador, vouchers
Uganda, food
Uganda, cash

19. Impact of cash transfers relative to food:
Percentage change in FCS
15
9.2
10
10.1
5.6
5
0.6
0
Niger, post-harvest seasonhungry seasonEcuador, cash Ecuador, vouchers
Niger,
-5
-10
-9.6
-11
-15
19
Yemen
Uganda

20. Impact of cash transfers relative to food:
Percent change in caloric acquisition
20.0
17.9
15.0
10.0
5.0
0.0
Ecuador, cash
Ecuador, vouchers
-5.0
-5.0
Yemen
Uganda
-4.0
-10.0
-10.0
-15.0
20
Niger: Cash transfers likely to have increased
caloric acquisition relative to food

21. 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?

22. Dollar cost of a cash transfer relative to a food transfer
5.00
0.00
Ecuador
Niger
Uganda
-5.00
Yemen
Ecuador, voucher
-2.96
-6.28
-10.00
-8.47
-8.20
-8.91
-15.00
-20.00
-25.00
-30.00
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23. 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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24. Number of additional beneficiaries gained by switching from
food to cash transfers
35000
32802
30000
25000
20000
13858
15000
9062
10000
5000
4841
5041
Ecuador
Niger
0
Uganda
24
Yemen
Total

25. 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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26. ADDITIONAL RESULTS
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
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27. Preferences for food, cash and vouchers
(Percent)
90
79
77
80
73
70
60
56
55
50
49
50
35
40
30
10
20
18
20
7
7
16
8
3
2
1
0
all food
27
12
8
all cash
all voucher
6
0

28. 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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29. SUMMARY
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
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30. 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
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