| By: |
Gertler, Paul;
Martinez, Sebastian;
Rubio-Codina, Marta |
| Abstract: |
The authors test whether poor households use cash transfers to invest in
income generating activities that they otherwise would not have been able to
do. Using data from a controlled randomized experiment, they find that
transfers from the Oportunidades program to households in rural Mexico
resulted in increased investment in micro-enterprise and agricultural
activities. For each peso transferred, beneficiary households used 88 cents to
purchase consumption goods and services, and invested the rest. The
investments improved the household ' s ability to generate income with an
estimated rate of return of 17.55 percent, suggesting that these households
were both liquidity and credit constrained. By investing transfers to raise
income, beneficiary households were able to increase their consumption by 34
percent after five and a half years in the program. The results suggest that
cash transfers to the poor may raise long-term living standards, which are
maintained after program benefits end. |
| Keywords: |
Economic Theory & Research,Small Area Estimation Poverty Mapping,Municipal Housing and Land,Land and Real Estate Development,Real Estate Development |
| Date: |
2006–08–01 |
| URL: |
http://d.repec.org/n?u=RePEc:wbk:wbrwps:3994&r=mfd |