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19 studies – Cash in the News

With the release of two important papers – one meta-analysis showing the poor do not spend cash transfers on alcohol or tobacco and another showing the anti-poverty effects of mobile money – this week saw a flurry of news on cash transfers, from the Christian Science Monitor, Yahoo Finance, Quartz, NPR and more.

GIVEDIRECTLY IN THE NEWS AND BLOGS

1. To fight poverty in Africa, a new-old solution: cash handouts
The Christian Science Monitor, Ryan Lenora Brown, December 11, 2016
“This puts the choice in the hands of the poor, and not me,” said Michael Faye, one of the co-founders of the charity GiveDirectly, which distributes unconditional cash to the poor in East Africa, in an interview with The New York Times. “And the truth is, I don’t think I have a very good sense of what the poor need.”

2. Impact giving: Where good intentions meet evidence
The Quad-City Times, Devan Patel, December 10, 2016
Dr. Paul Niehaus is an associate professor in the economics department at the University of California-San Diego and co-founder of the well-regarded charity, GiveDirectly. In his paper, “Theory of Good Intentions,” he looked into the reasons why only 3 percent of donors compare causes before giving.

3. Here’s what happens when you give cash to the extremely poor
Yahoo Finance, Ethan Wolff-Mann, December 9, 2016
The results have been similar for GiveDirectly, a top rated charity by Give Wellthat facilitates cash transfers. “The more than 50,000 extremely poor families GiveDirectly has transferred cash to are an example of what this research shows: that myths about the poor being irresponsible, lazy, and welfare queens are dead false,” Max Chapnick, a spokesperson at GiveDirectly, told Yahoo Finance. “Maybe the reason we expect the poor to spend cash grants on alcohol is that some of us might, but turns out they have more pressing needs to worry about.”

4. A Privately Funded Experiment in a Universal Basic Income
Reason.com, Jesse Walker, December 8, 2016
The organization behind the effort is GiveDirectly, a charity whose work in Africa is based on the idea of giving people cash without restrictions on how the money can be spent. (The underlying anti-paternalist principle is that the needy know their needs better than outsiders do.) That outlook led naturally to an interest in the basic income, and so the organizers conceived a randomized control trial…

5. Would a universal basic income fix US economic inequality? One group is spending $10 million to find out
Quartz, Michael J. Coren, December 8, 2016
The groups ESP has chosen to fund could provide some answers: GiveDirectly: …Will support a longitudinal basic income study in Kenya and how lessons learned could be applied to the US.

CASH TRANSFERS IN THE NEWS

6. Dial M For Money: Can Mobile Banking Lift People Out Of Poverty?
NPR, Nurith Aizenman, December 9, 2016
“Things are now modern!” they sing. “Things are now developed.” It’s an ad for a type of banking service called M-PESA that’s run entirely through your mobile phone. You set up an account with the phone company. You can send and receive funds by text. Or, if you need to make a cash deposit or withdrawal, you do it through a vast network of agents — small-time vendors in kiosks and shops, for example, that the company has set up.

7. Definitive data on what poor people buy when they’re just given cash
Quartz, Dan Kopf, December 7, 2016
A recently published research paper (paywall) by David Evans of the World Bank and Anna Popova of Stanford University shows that giving money to the poor has a negative effect on the consumption of tobacco and alcohol. Evans and Popova’s research is based on an examination of nineteen studies that assess the impact of cash transfers on expenditures of tobacco and alcohol. Not one of the 19 studies found that cash grants increase tobacco and alcohol consumption and many of them found that it leads to a reduction.

BASIC INCOME IN THE NEWS


8. Is Universal Basic Income the Answer to an Automated Future?
NBC, Dylan Love, December 7, 2016
First floated by 16th-century philosopher Thomas More as a “cure for theft,” basic income is finding new life 500 years later amid concerns over technology edging humans out of the workforce. If advanced machines are taking all the jobs, goes the thinking, then how will people earn money to support themselves? A “universal basic income” in which all citizens receive free money from their government — a figurative tax break just for being alive — is a possible solution.