Do cash transfers raise local prices?
Cash transfers appear on 43 recent papers in the economics journals, but only 4 of them carry a price, inflation, multiplier or spillover keyword. If a programme gives cash to a large share of a village, shopkeepers may raise prices and non-recipients may gain or lose. How large are these effects, and when do they reverse the programme's purpose?
What prompted this
Since October 2025, 43 papers carry a cash-transfer keyword (42 in economics journals): "cash transfers" on 30, "conditional cash transfers" on 11, "unconditional cash transfers" on 4. Only 4 of them also carry a price, inflation, local-economy, multiplier, spillover or general-equilibrium keyword.
Questions
- In villages where most households receive transfers, how much do food and rent prices rise, and for how long?
- Do non-recipients gain from the extra demand (as sellers and workers) or lose (as buyers)?
- Do mobile money transfers, which can be spent beyond the village, reduce the price effects?
Data that could help
Transfer programme rosters with saturation by village, local price surveys, and household surveys of recipients and non-recipients.
Next step
Use a programme with randomized saturation across villages to estimate price changes and the net effect on non-recipients.