Conditional cash transfers for energy poverty... and murder reduction

Conditional cash transfers — paying people to change behavior, usually to spur positive ‘social’ outcomes — continue to be in the news. Much of the focus is on their use as poverty reduction tools (Bolsa Familia in Brazil, JSY in India) through encouraging behaviors like antenatal care visits and sending children to school.

Two recent article — one in the NYT, one in Mother Jones — highlighted the use of CCTs and other targeted cash transfer tools for dramatically different outcomes.

In the NYT, poverty and energy issues were at the fore:

The Indian government subsidizes households’ purchases of cooking gas; these subsidies amounted to about $8 billion last year. Until recently, subsidies were provided by selling cylinders to beneficiaries at below-market prices. Now, prices have been deregulated, and the subsidy is delivered by depositing cash directly into beneficiaries’ bank accounts, which are linked to cellphones, so that only eligible beneficiaries — not “ghost” intermediaries — receive transfers.

Under the previous arrangement, the large gap between subsidized and unsubsidized prices created a thriving black market, where distributors diverted subsidized gas away from households to businesses for a premium. In new research with Prabhat Barnwal, an economist at Columbia University, we find that cash transfers reduced these “leakages,” resulting in estimated fiscal savings of about $2 billion.

There’s even more “smart” targeting coming soon. My advisor and colleagues in India have been working to “[describe] how the LPG subsidy could be even more completely targeted to the poor without any actual ‘taking away’ of the subsidy from the rich and middle class, which would likely trigger heavy political push back. As a result, several hundred million additional poor Indians could have affordable access in the next decade without increasing subsidy costs to the government (indeed probably reducing them) or LPG imports — both not likely to be popular.”

In Mother Jones, CCTs were being used to reduce murders:

Richmond hired consultants to come up with ideas, and in turn, the consultants approached [Devone] Boggan. It was obvious that heavy-handed tactics like police sweeps weren’t the solution. More than anything, Boggan, who’d been working to keep teen offenders out of prison, was struck by the pettiness of it all. The things that could get someone shot in Richmond were as trivial as stepping out to buy a bag of chips at the wrong time or in the wrong place. Boggan wondered: What if we identified the most likely perpetrators and paid them to stay out of trouble?

It seems to be working.

It was a crazy idea. But since ONS was established, the city’s murder rate has plunged steadily. In 2013, it dropped to 15 homicides per 100,000 residents—a 33 year low. In 2014, it dropped again. Boggan and his staff maintained that their program was responsible for a lot of that drop-off by keeping the highest-risk young men alive—and out of prison. Now they have a study to back them up.

On Monday, researchers from the National Council on Crime and Delinquency, a non-profit, published a process evaluation of ONS, studying its impact seven years in. The conclusion was positive: “While a number of factors including policy changes, policing efforts, an improving economic climate, and an overall decline in crime may have helped to facilitate this shift, many individuals interviewed for this evaluation cite the work of the ONS, which began in late 2007, as a strong contributing factor in a collaborative effort to decrease violence in Richmond.”

Tags: air pollution, california, energy, environmental health, health, household energy, murder

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