Localized cash transfers, price adjustments and induced competition

Last registered on May 30, 2022
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Pre-Trial

Trial Information

General Information

Title
Localized cash transfers, price adjustments and induced competition
RCT ID
AEARCTR-0009502
Initial registration date
May 26, 2022

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
May 30, 2022, 8:10 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

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Primary Investigator

Name
Mohit Karnani
Affiliation
Massachusetts Institute of Technology
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Other Primary Investigator(s)

PI Name
Claudia Martínez
PI Affiliation
Pontificia Universidad Católica de Chile
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PI Name
José Tessada
PI Affiliation
Pontificia Universidad Católica de Chile
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Additional Trial Information

Status
In development
Start date
2022-05-12
End date
2024-05-31
Keywords
Finance & Microfinance, Firms & Productivity, Labor, Welfare
Additional Keywords
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
We partnered with Locales Conectados, a Chilean NGO, to conduct a cash transfer experiment in Bogotá, Colombia. The main treatment consists of direct cash transfers via SMS to low-income households, who can use these digital funds to purchase goods at local mom-and-pop stores that are onboarded by the NGO. The research design comprises two treatment arms that affect both sides of the market: 1) on the demand side, random qualifying neighborhoods will receive the SMS texts while the control neighborhoods will not, and 2) on the supply side, some treatment neighborhoods will have many onboarded stores, as opposed to only a few in the other treatment arm. The idea is not only to measure the impacts that direct cash transfers have on the welfare of households (using surveys), but also to understand how firms adjust their prices upon this highly-localized liquidity inflow, and how competition might attenuate the latter adjustment.
External Link(s)

Registration Citation

Citation
Karnani, Mohit, Claudia Martínez and José Tessada. 2022. "Localized cash transfers, price adjustments and induced competition." AEA RCT Registry. May 30. https://doi.org/10.1257/rct.9502-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2022-05-31
Intervention End Date
2023-07-31

Primary Outcomes

Primary Outcomes (end points)
Household consumption, store sales, store prices, financial inclusion of households and stores.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
For the pilot:
After collecting 200 baseline household surveys, 100 of them will be randomly picked to receive a digital wallet with $100 USD available over 2 months. They will only be allowed to spend this digital currency in onboarded, local mom-and-pop stores.
After collecting 60 baseline store surveys, 30 of them will be randomly picked to be onboarded in the Locales Conectados platform. They will be allowed to redeem the digital cash for local currency when selling their goods to participating households.
Experimental Design Details
Not available
Randomization Method
Randomization done in office by a computer
Randomization Unit
Individual randomization at the household and firm level for the pilot. Neighborhood-level randomization for the main experiment.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
200 households and 60 firms for the pilot.
Sample size: planned number of observations
200 households and 60 firms for the pilot.
Sample size (or number of clusters) by treatment arms
100 treatment households and 100 control households. 30 treatment firms and 30 control firms.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan