Abstract
Hundreds of billions of dollars are spent each year on aid programs. In 2014, for example,
OECD countries provided USD 135 billion in official development assistance (OECD,
2014) and US charitable giving to international programs exceeds USD 20 billion (Reuters,
2012). Beyond this, developing country governments allocate substantial sums to programs
intended to benefit the poor and spur development. These billions of dollars are allocated
across a wide variety of programs such as infrastructure, education, health, agriculture and
direct assistance (e.g., subsidized goods, food aid, livestock transfers and cash transfers). A
fundamental problem, impacting the hundreds of millions of individuals reached by aid, is
how best to allocate spending across programs.Yet it is incredibly difficult to decide how to
allocate resources across programs. An important input, among others, into the allocation
decision is how much recipients value particular forms of aid relative to the cost of providing
that aid, including both the value of goods and services received by beneficiaries and the
overhead cost of providing those goods and services.
A central aim of this study is to develop a replicable methodology to rapidly and efficiently
estimate the value of different types of aid to recipients. This information can be used to
determine whether a particular form of aid is valued more highly than its cost and to assess
the relative value of alternative uses of aid funding.