Do Cash Transfers to the Poor Encourage Feckless Behaviour?

In a brilliant working paper, Evans and Popova consider whether non-conditional cash transfers encourage people in low-income countries to increase their use of ‘temptation goods’, such as tobacco and alcohol.[1] Their systematic review found 19 studies. The answer to the question is ‘no’, there is no positive effect on consumption of temptation goods. This effect is confirmed if the analysis is confined to randomised trials. In fact the point estimate signifies lower consumption of the temptation goods in association cash transfers. The extra money provided by the cash transfers seems to be wisely invested, for example, in childhood education. Of course, this does not mean that there are no instances where someone (usually a man I am afraid) took money (which is usually given to a woman) in order to go drinking. But then, it is a poor heart that never rejoices!

— Richard Lilford, CLAHRC WM Director

Reference:

  1. Evans DK, Popova A. Cash Transfers and Temptation Goods. University of Chicago, IL. 2016.
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