Theoretically, the effect of household cash transfers depends on how businesses respond to the demand shock and on the resulting effect on prices. Such market effects have been largely overlooked in the literature, which mostly focuses on direct impacts on households. We study the impact of a household cash transfer program on retail businesses operating in two refugee sites in Kenya. Refugees receive a monthly mobile money transfer that can only be spent at licensed businesses. We compare licensed and unlicensed businesses, using matching methods to control for all variables considered in the licensing process. We show that licensed businesses have much higher revenues and profits and charge higher prices than unlicensed businesses. The cash transfer program created a parallel retail market in which a limited number of businesses enjoy high market power. We identify a series of market imperfections explaining the results.
Publishing Organizations: Na'amal, Jobtech Alliance
Author(s): Dr Shuting Xia, Lorraine Charles
Publishing Organizations: ODI Global
Author(s): Caitlin Sturridge, Amanda Gray Meral, Kerrie Holloway, Simon Levine
Publishing Organizations: The Journal of Ethnic and Migration Studies (JEMS)
Author(s): R.A. Rizka Fiani Prabaningtyas, Tri Nuke Pudjiastuti, Antje Missbach, Faudzan Farhana, Athiqah Nur Alami
Publishing Organizations: SSM - Mental Health
Author(s): Dr. Ilana Seff, Arturo Harker Roa, Raymond Atwebembere, Jennie Cottle, Ned Meerdink, Adriana Monar, Diany Castellar, Dr. Lindsay Stark
Publishing Organizations: Refugee Self-Reliance Initiative
Author(s): Dr. Ilana Seff, Dr. Lindsay Stark, Kari Diener, Kellie Leeson, Ned Meerdink, Alli Gillespie
Publishing Organizations: The World Bank
Author(s): Jan von der Goltz, Kirsten Schuettler, Julie Bousquet, Tewodros Aragie Kebede
Publishing Organizations: Norwegian Refugee Council
Publishing Organizations: Refugee Self-Reliance Initiative
Author(s): Climate Risks and Self-Reliance Technical Working Group (TWG)
Publishing Organizations: Jobtech Alliance, Na'amal, Hilton Foundation
Publishing Organizations: International Institute for Environment and Development (IIED)
Author(s): Boel McAteer and Kellie Leeson