How Effective Is More Money? Randomizing Unconditional Cash Transfers in the US

"The data are most consistent with the notion that receiving some but not enough money made participants’ needs---and the gap between their resources and needs---more salient, which in turn generated feelings of distress."

I think the current title "Cash Transfers: No positive effect of cash – if anything, negative effects (ssrn.com)" is greatly missing the message here.

There are some factors in the psychology of poverty that explain some of this.

When someone in poverty gets a windfall, they tend to spend it immediately because they know that if they save it, it will get nickeled and dimed away from them in short order by their existing debts or their friends and family asking for help. The only way they will actually get to enjoy that money is to spend it all right away. After doing that, they are no better off financially than they were before.

The other aspect of this study is that the cash transfers were not enough to cover the participant's needs. Perhaps it would be different if the money was enough to cover all their bills.

The conclusions by the authors in the paper and tweets are way too broad.

This is just about self-reported feelings after a single pay out; that doesn't say much about the effectiveness of cash support in general.

This is interesting, but flagging for editorialized title. The authors note specifically this is perceived effects based on survey results. That's very different than the editorialized title "No positive effect of cash".

Should just use the title of the study: "How Effective Is (More) Money? Randomizing Unconditional Cash Transfer Amounts in the US"

In the U.S. at least, we already have a fairly good proxy for observing the effects of one time cash transfers: tax returns (not unconditional of course). They are indeed sources of stress during that time of year that can make or break relationships in poorer areas in my experience. A favorite skit from comedian Lou Ratchett on that: https://youtu.be/rV10F1zpfCs.

More interesting than a single payment which can be fleeting is the effect of a long-term increase in income. For example, what happened to the families who received increased food stamp benefits during the pandemic?

If anyone wants to go a little deeper on this topic I recommend Givewell's page on direct cash transfers:

https://www.givewell.org/international/technical/programs/ca...

I prefer to dedicate my money to parasite prevention but my wife finds this approach to charity compelling.

See: https://twitter.com/jonj/status/1544318990880841732?s=21&t=r...

Amazing the lengths that people will go to to convince themselves not to feel guilty about not helping other people.