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The impact of a conditional cash transfer programme on consumption in Colombia

Journal article
Abstract: We estimate the impact on consumption of a large welfare programme in Colombia, Familias en Acción. Our best estimate of the effect takes into account pre-existing differences between treatment and control areas and controls for a wide range of observable characteristics that are likely to affect household consumption.

Main findings: The impact of the programme on household consumption is large both in rural and urban areas at around 15% of total consumption, most of which is devoted to food. Moreover, cash transfer is spent on "desirable" goods (nutrient-rich food, healthcare and education) and has no significant effect on consumption of "undesirable" goods such as alcohol and tobacco. Consumption of other goods for adults, such as clothes and footwear, has not increased significantly; on the other hand, consumption of footwear and clothes for children has increased. This indicates that the programme benefits children rather than other members of the household.