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Abstract
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Understanding how firms and markets shape local supply curves in general equilibrium, to which degree economies can absorb (and change in response to) large local demand shocks, and how consumers shopping patterns and competitive pressures respond is crucial for understanding long-term development and the effects of macroeconomic policies. We estimate the high-frequency causal impacts of universal USD 550 cash transfers to every adult in the Khongoni District in Malawi on expenditure, prices and market activity. The rollout of the 45 million in cash transfers by the NGO GiveDirectly is randomized across 34 Group Village Headman (GVHs), an administrative unit corresponding approximately to a market catchment area, will reach over 80,000 individuals over the course of 12 months, and correspond to 90% of baseline GDP. Using random variation in treatment timing, together with bi-weekly price data for over 100 products and monthly enterprise surveys in all markets within the study area and a matched sample of markets outside the study area, as well as monthly expenditure surveys with 2500 eligible households, we document high-frequency marginal propensities to consume by product (Engel curves), inflationary impacts, expenditure switching of households across markets, and changes in resulting market activity and the productive environment. This will allow us to trace out short- and medium run supply curves at the firm- and market level.
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After
Understanding how firms and markets shape local supply curves in general equilibrium, to which degree economies can absorb (and change in response to) large local demand shocks, and how consumers shopping patterns and competitive pressures respond is crucial for understanding long-term development and the effects of macroeconomic policies. We estimate the high-frequency causal impacts of universal USD 550 cash transfers to every adult in the Khongoni (Phase I) and Chiradzulu Districts (Phase II) in Malawi on household outcomes, including expenditure, enterprise outcomes, and on market activity and prices. The rollout of the approx. 100 million in cash transfers to approx. 200,000 recipients by the NGO GiveDirectly is randomized, and treatment intensity varies across three geographical levels: a) the traditional authority, b) Group Village Headman (GVHs), an administrative unit corresponding approximately to a market catchment area, and c) villages.
Using random variation in treatment timing, together with high-frequency price data for over 100 products (monthly or bi-weekly), and monthly enterprise surveys in all markets within the study area and a matched sample of markets outside the study area, as well as monthly expenditure surveys with eligible households, we document high-frequency marginal propensities to consume by product (Engel curves), inflationary impacts, expenditure switching of households across markets, and changes in resulting market activity and the productive environment. This will allow us to trace out short- and medium run supply curves at the firm- and market level.
In Phase II, we additionally inform a random subset of traders in treated market ex-ante about upcoming demand increases (the IRFs estimated in Phase I). Predicted demand shocks naturally vary in size, and we additionally vary the salience of the temporary or permanent nature of the shock. This allows us to test whether demand predictability and variability affect firm and market-level supply dynamics, and draw inference on the competitive environment within which firms set prices.
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Trial End Date
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November 30, 2025
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December 31, 2028
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Last Published
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January 16, 2024 04:37 AM
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February 04, 2025 02:18 AM
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Intervention End Date
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November 19, 2024
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February 04, 2025
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Primary Outcomes (End Points)
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- household expenditure (by product group, by location/market)
- output price inflation (by product group)
- market activity (total revenue, profits, number of customers, labor supply)
- imports (intermediate input purchases from within vs. outside the study area)
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After
- household expenditure (by product group, by location/market)
- output price inflation (by product group)
- market activity (total revenue, profits, number of customers, labor supply)
- imports (intermediate input purchases from within vs. outside the study area)
- child mortality
- other household outcomes, including assets, labor supply, food security, mental health, female empowerment, etc.
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Experimental Design (Public)
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Before
The Khongoni District in Malawi is divided into 34 Group Village Headman (GVH) administrative units. GVHs have a population of 2000 adults, or approximately 800 households on average. Treatment is randomized at the level of the GVH. Prior to the start of this study, GiveDirectly (GD) had already worked in 9 GVHs, which were selected quasi-randomly. Treatment order among the remaining 25 GVHs (the 'experimental sample') was randomized. GD will sequentially target GVHs in this randomized order, and the actual rollout timing will depend on logistical constraints and rollout capacity. We anticipate an average of 2-3 GVHs will be treated each month, for an overall rollout window of approximabely 12 months.
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not public until completion of the intervention to maintain the integrity of the study.
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Planned Number of Clusters
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25 clusters in the experimental sample. 9 additional clusters for quasi-random analyses.
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Phase I: Treatment is assigned at the GVH level, randomly across 25 GVHs (and 9 additional GVHs which were treated non-randomly before the start of the experiment).
Phase II: Treatment is assigned across 10 TAs, 113 GVHs, and approx. 900 villages as described above. Information treatments are randomized at the individual enterprise level (though for later expansions, we may consider clustering treatment intensity at the market-level).
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Planned Number of Observations
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Households: We will survey 2500 households (100 per GVH) for a total of 9 rounds, or a total of 22,500 hosuehold-by-month observations
Prices: We will collect up to 2 price quotes for 82 goods and services at 51 markets for a total of 24 bi-weekly rounds, or a total of over 200,736 price quotes.
Market sellers: We will survey 20 sellers at each of the 51 markets, monthly for a total of 12 rounds, or a total of 12,240 seller-by-month observations.
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Phase I:
Households: We will survey 2500 households (100 per GVH) for a total of 9 rounds, or a total of 22,500 hosuehold-by-month observations
Prices: We will collect up to 2 price quotes for 82 goods and services at 51 markets for a total of 24 bi-weekly rounds, or a total of over 200,736 price quotes.
Market sellers: We will survey 20 sellers at each of the 51 markets, monthly for a total of 12 rounds, or a total of 12,240 seller-by-month observations.
Phase II: This is split into two stages, 344 villages in stage I, and approx. 600 villages in stage II.
Households: We will census all households at baseline, and survey 8 households per village, 2752 in stage I, and approximately 8,000 households across both stages. Households will be surveyed in person at baseline, as well as 1-2 months after transfers, 5-6 months after transfers, and 11-12 months after transfers.
Enterprises: We will census all enterprises operating in all approx. 80-100 weekly markets within Chiradzulu, monthly during the period of most intense transfers (approx. 2-3 months prior, and up to 6 months after the large transfers), and bi-monthly or less frequently thereafter. We will survey approx. 50 sellers per market in a panel of over 4,000 sellers to be followed over time.
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Sample size (or number of clusters) by treatment arms
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Households: This is an event-study design. All GVHs within Khongoni will eventually be treated. We will have at least 1 (sometimes more) baseline/control observation before treatment occurs for each household, (t = - 1), 1 observation in the month where the small token transfer goes out (t = 0) , and 7 observations thereafter in months t = {1, 2, 4, 6, 8, 10, 12} after the small transfer.
Markets (prices and sellers): For markets (prices and seller activity), we will use baseline expenditure shares to determine treatment intensity. We will have 14 official and 24 unofficial markets within the study area. At baseline, we survey 42 official markets outside the stury area, of which we select 14 as a comparison group based on baseline matching. Our total analysis sample is therefore 51 markets.
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Phase I: Details in PAP
Phase II: Details in PAP
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Keyword(s)
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Finance, Firms And Productivity, Gender, Welfare
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Behavior, Education, Electoral, Finance, Firms And Productivity, Gender, Health, Labor, Welfare
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Intervention (Hidden)
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Before
The intervention is a universal USD 550 cash transfer rolled out to every adult individual in the Khongoni District in Malawi by the NGO GiveDirectly (GD). The Khongoni District in Malawi is divided into 34 Group Village Headman (GVH) administrative units. GVHs have a population of 2000 adults, or approximately 800 households on average.
GD enrols households within each GVH by sequentially visiting each village within a GVH. All villages are visited within a month. Before beginning work in a village, GD holds a meeting of all households in the village to inform villagers that GD will be working in their village, explain their program and GD as an organization. GD staff then conduct a household census of the village, collecting information on household names, contact information and housing materials. Transfers are universal, and targeted individually. All adult household members are individually eligible for transfers. GD staff confirm the eligibility of the household, inform the household of their eligibility for the program and register the household for the program. This is the point at which households learn they will be receiving transfers, as well as the amount of the transfers, the transfer schedule, and the fact that the transfer is unconditional.
Transfers are then sent out via mobile money to all verified adults (individually) in two tranches: The first 50 USD small transfer is (typically) paid out at least one month after the census, the remaining 500 USD are paid in the following month.
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After
Phase I:
The intervention is a universal USD 550 cash transfer rolled out to every adult individual in the Khongoni District in Malawi by the NGO GiveDirectly (GD). The Khongoni District in Malawi is divided into 34 Group Village Headman (GVH) administrative units. GVHs have a population of 2000 adults, or approximately 800 households on average.
GD enrols households within each GVH by sequentially visiting each village within a GVH. All villages are visited within a month. Before beginning work in a village, GD holds a meeting of all households in the village to inform villagers that GD will be working in their village, explain their program and GD as an organization. GD staff then conduct a household census of the village, collecting information on household names, contact information and housing materials. Transfers are universal, and targeted individually. All adult household members are individually eligible for transfers. GD staff confirm the eligibility of the household, inform the household of their eligibility for the program and register the household for the program. This is the point at which households learn they will be receiving transfers, as well as the amount of the transfers, the transfer schedule, and the fact that the transfer is unconditional.
Transfers are then sent out via mobile money to all verified adults (individually) in two tranches: The first 50 USD small transfer is (typically) paid out at least one month after the census, the remaining 500 USD are paid in the following month.
Phase II: The same intervention, expanded to Chiradzulu district. Randomization details below. In addition, there will be information treatments to a random subset of enterprises operating at all weekly markets within the district. These will inform enterprise owners ex-ante about upcoming demand shocks (approximately 1 month and 1 week prior). The treatment will be delivered in-person by enumerators, and re-inforced through text messages, phone calls, and WhatsApp reminders. It will contain the size (and dynamics) of the expected upcoming demand shock, predicted using Phase I impulse response functions on spending by product and local market. We will additionally vary the salience of the permanence of the shock, by either highlighting only the expected demand increase next month vs. showing the entire impulse response function predicting elevated demand for the next 12 months at least.
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