DP7326 Food and Cash Transfers: Evidence from Colombia

Author(s): Orazio Attanasio , Erich Battistin , Alice Mesnard

Publication Date: June 2009

Keyword(s): demand patterns , evaluation of welfare programmes , food Engel curves

JEL(s): C52 , D12 , I38

Programme Areas: Development Economics , Public Policy

Link to this Page: www.cepr.org/pubs/dps/DP7326.asp.asp

We study food Engel curves among the poor population targeted by a conditional cash transfer programme in Colombia. After controlling for the endogeneity of total expenditure and for the (unobserved) variability of prices across villages, the best fit is provided by a log-linear specification. Our estimates imply that an increase in total expenditure by 10% would lead to a decrease of 1% in the share of food. However, quasi-experimental estimates of the impact of the programme on total and food consumption show that the share of food increases, suggesting that the programme has more complex impacts on expenditure patterns than those induced by higher household income and expenditure.