Welfare Effects of Social Cash Transfers in Chipata and Kazungula Districts of Zambia

Abstract

This study uses the odds-weighted regression approach and data from two spatially separated social cash transfer (SCT) programs in Zambia to determine the impact of cash transfers on household welfare. The same analytical framework was also applied on sub-samples of poor and relatively less poor households, where the wealth ranking was done using an asset-based index derived through principal components analysis. The results confirm positive SCT effects on per capita consumption expenditure and that the sizes and relative significance of these effects vary by program design and by the household's asset wealth. The effects were especially unambiguously positive and significant for non-food consumption. While the impact on food expenditure was positive and significant in the rural Kazungula SCT program, the impact on non-food per capita consumption expenditure was three times greater. In the urban scheme in Chipata, program impacts were only significant on non-food expenditure. Future intervention designs need to take into account such heterogeneity in level and shape of potential impacts if they are to be effective.