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

Abstract

Abstract We estimate the average treatment effect (ATE) of cash transfers on farm profitability by exploiting a randomised 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 the program had sizable impacts on farm profitability, but these impacts are spread unevenly in the population. The program benefited more those with greater productive potential and had strong distributional impacts.