Efficient delivery of subsidies to the poor: Improving the design of a cash transfer program in Ecuador

A-Tier
Journal: Journal of Development Economics
Year: 2009
Volume: 90
Issue: 2
Pages: 276-284

Authors (2)

Carrillo, Paul E. (George Washington University) Ponce Jarrín, Juan (not in RePEc)

Score contribution per author:

2.018 = (α=2.02 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Many governments provide monetary transfers to low-income families. The mechanism through which these subsidies are distributed may contain several inefficiencies that diminish the net-value obtained by the recipients. In this paper, we build and estimate a behavioral dynamic model that allows us to evaluate the efficiency of current and alternative distribution mechanisms. The proposed model is simple and resembles the individual's decision to collect the transfer. To estimate it, we use data from a cash transfer program in Ecuador where recipients incur high transaction costs each time they collect their benefits. Despite its simplicity, our model is able to replicate the observed data remarkably well. We use it to simulate alternative payment mechanisms and show that an adequate design of the delivery of payments can substantially increase the value of cash transfer programs.

Technical Details

RePEc Handle
repec:eee:deveco:v:90:y:2009:i:2:p:276-284
Journal Field
Development
Author Count
2
Added to Database
2026-01-25