Question 1

If F is the quantity food to which households are entitled,Ps is the subsidized price the household has to pay to obtain the good,and Pᵤ is the unsubsidized price,what is the formula for the cash value of any transfer?

Accepted Answer

The cash value of the transfer will be the difference between the unsubsidized price and the subsidized price multiplied by the quantity of food, which is represented by the formula (Pu - Ps)*F.

Question 2

When a transfer program benefits lead to more influence in the family,__________effects are introduced.Indeed empirical studies have confirmed the presence of _______________effect where the benefits targeted to specific household member stick to those members.

Accepted Answer

Intra-household effects are introduced when transfer programs affect dynamics within the family, and the flypaper effect refers to the phenomenon where benefits targeted at specific household members tend to remain with those individuals.

Question 3

The specific objectives of individual targeted transfer programs can differ in all of the following ways except:

Accepted Answer

Reducing current poverty is a common objective of all individual targeted transfer programs, regardless of their specific design or target population.

Question 4

What is meant by the Coady et al.(2004)study that found that 25% of transfer programs were regressive?

Accepted Answer

The study found that 25% of transfer programs were regressive, meaning that a larger share of the program benefits went to non-poor rather than the poor. Option A is incorrect because it describes a progressive program. Option B is incorrect because it describes a program with increasing marginal rates, which is not necessarily regressive. Option D is incorrect because it describes a program with decreasing marginal rates, which is also not necessarily regressive.

Question 5

The most obvious impact on a household who participates in transfer program is the increase in non-labor income,which can _____________.

Accepted Answer

Transfer programs like cash transfers and welfare payments provide households with additional income, which relaxes their budget constraints and induces income effects. This means that they can now afford to purchase more goods and services, leading to an increase in their welfare. There is no tightening of budget constraints, as the household now has access to more resources. Furthermore, the increase in non-labor income may induce substitution effects, as the household may choose to substitute away from cheaper goods towards more expensive ones, but this is not the most obvious impact on the household.

Question 6

The increase in a household's well-being resulting from participation in a targeted transfer program becomes larger (all else equal)when?

Accepted Answer

When a targeted transfer program raises a household's non-labor income without requiring the household to undertake costly behaviors, the household's overall income (including the transfer payment) increases, leading to an increase in well-being. In contrast, if the program requires the household to undertake costly behaviors, such as work requirements or training, the increase in well-being may be less significant. Therefore, option A is the best choice.

Question 7

Eligibility rules can include all of the following except:

Accepted Answer

Eligibility rules can include means testing, proxy means tests and poverty score cards, but they do not target lifestyles.

Question 8

Government structure design decisions include:

Accepted Answer

Government structure design decisions include determining eligibility requirements and transfer sizes, which are fundamental aspects of how a program is structured and operates.

Question 9

Cash and food transfer programs may have important effects on local markets for food,but only when the programs are ________ relative to the local markets.In such cases the ___________ in price ________consumers and ___________ sellers.

Accepted Answer

When cash and food transfer programs are large relative to the local markets, they can lead to an increase in price. This increase in price hurts consumers because they have to pay more for food, but it helps sellers because they can sell their goods at higher prices.

Question 10

In order for a program to achieve significant poverty reduction,policy makers hope to avoid two types of targeting failure:

Accepted Answer

Non-coverage of the poor (exclusion error) and leakage to the non-poor (inclusion error) are the two types of targeting failure that policy makers hope to avoid in order to achieve significant poverty reduction. This means that the program should effectively reach the poor (avoiding exclusion error) and not provide benefits to those who are not poor (avoiding inclusion error). Option B correctly identifies these two types of targeting failure. Option A is incorrect because it incorrectly identifies leakage to the non-poor as inclusion error and non-coverage of the poor as exclusion error. Option C is incorrect because it identifies over-coverage of the poor as inclusion error, which is contradictory to the definition of inclusion error. Option D is incorrect because it incorrectly identifies over-coverage of the poor as exclusion error and under-coverage of the poor as inclusion error.

Question 11

Official transfer sizes are a measure of a transfer program's _______?

Accepted Answer

Official transfer sizes refer to the amount of money or resources provided by a transfer program. Therefore, it measures the generosity of the program.

Question 12

Rationed food subsidies:

Accepted Answer

The answer of Rationed food subsidies:
...

Question 13

Social norms and institutions guide some families or communities to provide mutual assistance.So a household that can receive a transfer may be unable to receive the private help they would normally receive.This public transfer is said to:

Accepted Answer

This public transfer is said to crowd out private transfers as the community or family who may have provided private assistance may refrain from doing so since they assume that the recipient is already receiving assistance from the government.

Question 14

All of the following are reasons that a poor household may fail to participate in a transfer program except:

Accepted Answer

The reason a poor household may fail to participate in a transfer program is not because they perceive the benefits outweigh the costs of the program. This perception would generally encourage participation, not deter it.

Question 15

When households consume more leisure time as a results of a transfer program,they reduce their labor supply,and the transfer is said to __________.Theoretically this decrease in labor supply could cause wages to ___________.

Accepted Answer

When households consume more leisure time, it means they are reducing their labor supply. This can cause a reduction in the overall labor supply, leading to an increase in wages due to the law of supply and demand. Therefore, the transfer program will crowd out labor income while increasing wages, making option C the correct answer.

Question 16

All of the following could be reasons why transfer program participants' non-labor fails to increase by the full amount of the transfer except:

Accepted Answer

Participants typically do not have to pay for eligibility testing themselves; this cost is usually covered by the program.

Question 17

Some programs employ proxy means tests which:

Accepted Answer

Proxy means tests employ short questionnaires often called "poverty score cards" to determine eligibility, which makes them different from categorical restrictions and means testing.

Question 18

Job counseling services,nutrition lectures and opportunities to meet with other participants are examples of _______,while the time,money and psychological costs of traveling to application and distribution sites,waiting in line,complying with behavioral conditions,and dealing with program personnel are examples of ____________:

Accepted Answer

The first set of examples provided refers to the benefits and costs experienced by the individual participant, indicating private benefits and private costs.

Question 19

Conditional cash transfer programs differ from traditional targeted transfer programs in that they___________.

Accepted Answer

Conditional cash transfer programs require poor families to do something to receive the money such as send their children to school or get them vaccinated. Traditional targeted transfer programs do not have such requirements. This difference is intended to promote investments in human capital and improve long-term outcomes.

Question 20

When a targeted transfer program is able to respond quickly to shocks is said to exhibit ________

Accepted Answer

Flexibility in targeting refers to the ability of the program to quickly identify and reach the intended beneficiaries. If the program is able to respond quickly to shocks, it implies that it has a flexible targeting mechanism that can adapt to changing circumstances. Efficiency, flexibility in funding, and flexibility in fee collection are not directly related to the program's ability to respond to shocks.

Quiz 15: Targeted Transfer Programs