Applied Micro Economics Seminar - Anandi Mani - "Structuring cash transfers: cash flow preferences, seasonality, and financial decisions in rural Kenya"

Abstract

We examine the preferences of low-income households in Kenya over the structure 

of unconditional cash transfers. Most preferred lumpy transfers, and some

preferred deferred receipt—in contrast to the typical structures of safety-net pro-

grams, but consistent with evidence on the financial challenges of poverty. Turning

to consequences, receiving transfers later in the year raised income 1.5 years later—

but willingness to defer receipt was sensitive to small changes in cash flow around

the time of decision-making. Taken together, these results illustrate how adapting

cash transfer design to the decision-making environment of those in poverty could

improve financial choices and outcomes.