For real? Cash transfers’ effects on food consumption during price shocks in Kenya

Abstract

ABSTRACT Cash transfers' positive impacts on food expenditures are well documented. However, beneficiaries' increased market-reliance might render their real consumption more vulnerable to price shocks, which hit developing countries regularly. We contribute to the sparse evidence base on this issue by analysing the effects of a cash transfer programme on food demand during a drastic price shock in Kenya. We find that the shock decreases beneficiaries' real food consumption more than that of non-beneficiaries. The magnitude of this effect varies considerably depending on how particular food baskets are affected by the shock.