Analytical Framework for Evaluating the Productive Impact of Cash Transfer Programmes on Household Behaviour: Methodological guidelines for the From Protection to Production (PtoP) project

Abstract

Cash transfer (CT) programmes have become an increasingly important tool for social protection in low and middle income countries. To date very little has been done to rigorously examine the economic impacts such programs may have on beneficiary households and individuals. The regular and predictable provision of cash may help households overcome various constraints associated with missing or poorly functioning markets for goods, inputs, labour, and financial services, and promote greater productivity and income. The From Protection to Production (PtoP) project is currently carrying out rigorous quantitative impact evaluations of cash transfers programs in sub-Saharan Africa (SSA) to shed light on this hypothesis.

The seven cash transfer programmes included in the project have different programme characteristics and, more importantly, different evaluation designs. A toolset of techniques is thus required to handle these different dimensions and produce comparable and accurate impact estimates.

The goal of quantitative impact evaluation is to attribute an observed impact to the programme intervention. A counterfactual is needed to tell us what would have happened to the beneficiaries if they had not received the intervention. The most direct way of ensuring a good counterfactual is via an experimental design (randomised control trial, RCT), in which households are randomly allocated between a control group and a treatment group. The randomisation guarantees that on average control and treatment households will be identical, except for exposure to the cash transfer programme.

RCTs are often difficult to implement for political, ethical, and budgetary reasons. When they are not available non-experimental design techniques are required. Typically these involve propensity score methods, which construct a statistical counterfactual by matching up treatment households with similar looking control households in some way.

Specific analytical questions and corresponding data requirements are discussed in the paper. One important consideration is the need to understand how cash transfers affect different types of individuals and households. This entails examining how impacts vary by household size (for fixed transfers), how individual labour allocation decisions vary across gender and age, and how production decisions vary according to a household’s labour endowment, geographic location and access to key assets such as land.

Citation

Asfaw, S.; Daidone, S.; Davis, B.; Dewbre, J.; Romeo, A.; Djebbari, H.; Winters, P.; Covarrubias, K. Analytical Framework for Evaluating the Productive Impact of Cash Transfer Programmes on Household Behaviour: Methodological guidelines for the From Protection to Production (PtoP) project. Food and Agriculture Organization of the United Nations, Rome, Italy (2012) 40 pp.

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