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Structural Estimation of Spatial Spillover Effects of Cash Transfers
Cash transfers are increasingly used to deliver economic development, humanitarian assistance and social protection programmes in low-income and fragile countries. Accurate measurement of any ‘spillover’ effects experienced by people other than the direct recipients of cash transfers is essential for the overall evaluation of such programmes. Existing methods for estimating these spillover effects are limited because they rely on unrealistic assumptions or do not fully exploit the data available. We will develop innovative methods for causal estimation of spillover effects of cash transfers, which are rooted in economic theory and are based on a thorough understanding of the local economy developed through qualitative research. In particular, we will explicitly model and estimate the extent of economic integration of local markets, and how this affects how spillover effects vary over space and across different groups of non-recipients. These methods will involve more realistic assumptions and will fully utilise the data available.The main geographical focus of our project is rural Kenya, reflecting data availability and project team expertise.