The Impact of Conditional Cash Transfer Programs on Food Consumption in Honduras, Mexico, and Nicaragua

Abstract

This paper examines the impact of three conditional cash transfer programs, PRAF, PROGRESA, and RPS on food consumption. Our nonparametric analysis suggests that the effect on these programs is likely to be highest for the poorest households and this is indeed true in all three countries, even Honduras, where transfer levels were considerably lower than in Mexico or Nicaragua. Our intent-to-treat estimates indicate that exposure to these conditional cash transfer programs raises caloric acquisition by households in the poorest tertiles by 5.6 percent in Mexico, 6.9 percent in Honduras, and 12.7 percent in Nicaragua. As suggested by economic theory, there is also likely to be an improvement in the diversity of recipients' diets. In all three countries, these programs led to improvements in the composition of the diet and again, this was most pronounced among the poorest households.

Keywords: food consumption, conditional cash transfers, Mexico, Nicaragua, Honduras

JEL Classification: O12, D12