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Heterogeneous impacts of cash transfers on farm profitability. Evidence from a randomized study in Lesotho

Ervin Prifti
Youth jobs, skills and entrepreneurship

We estimate the Average Treatment Effect of cash transfers on farm profitability by exploiting a randomized control trial for the evaluation Lesotho’s biggest transfer program. We also explore impact heterogeneity by unpacking the ATE into group-specific parameters. We estimate Conditional Average Treatment Effects to describe how treatment effects vary with selected covariates and Quantile Treatment Effects to illustrate the variability of effects at different outcome levels. We find that unconditional transfers had sizable impacts on farm profitability, but these impacts are spread unevenly in the population. The transfers benefited more those with greater productive potential and led to strong distributional impacts.