Bureau, and did not currently receive aid from either _Liconsa_ , a subsidized milk program, or _Oportunidades_ , a conditional cash transfer program. PAL villages were therefore typically poorer and more rural than the widely-studied _Oportunidades_ villages.<sup>6</sup> Within eligible villages, households were eligible for the program if they fell below the threshold of a poverty index derived from observable characteristics of permanent income (Vazquez Mota, 2004).

PAL food transfer packages were chosen by nutritionists to provide a balanced diet of about 1,750 calories per day, per household (Campillo Garcia, 1998) and contained seven basic items (enriched corn flour, rice, beans, dried pasta soup, biscuits (cookies), fortified milk powder, and vegetable oil) and two to four supplementary items (including canned sardines, canned tuna fish, lentils, chocolate powder, packaged breakfast cereal, and corn starch). All the items were common Mexican brands and were by and large available in local stores. The transfer was not conditional on family size; was delivered bimonthly (two food boxes at a time); resale of in-kind food transfers was not prohibited; and the wholesale cost to the government per box was about 150 pesos (approximately 15 U.S. dollars).

# **PAL experiment**

Concurrent with the national roll-out of the program, a random sample of 208 villages in southern Mexico were chosen for inclusion in an experiment.<sup>7</sup> Villages were randomized into three treatment arms, in which eligible households received either a monthly in-kind food transfer (50 percent of villages), a 150 peso per month cash transfer (25 percent of villages), or nothing (the remaining 25 percent of villages). Approximately 89 percent of households in the in-kind and cash villages were eligible to receive transfers (and received them).

In addition to the randomization of transfer modality, the experiment also assigned all the cash villages and a randomly selected half of the in-kind villages to receive health, nutrition, and hygiene classes, which were designed to promote healthy eating and food preparation practices. In practice, however, few transfer recipients report attending classes and, importantly, administrators confirmed that the conditionality of transfers on class attendance was never enforced - that is, no household was denied transfers for not attending classes.<sup>8</sup> Fur-

> 6Villages were not incorporated in _Oportunidades_ if they did not have health facilities and/or secondary schools in close enough proximity, as needed to fulfill the conditionality of _Oportunidades_ transfers.

> 7The experiment was implemented in eight states: Campeche, Chiapas, Guerrero, Oaxaca, Quintana Roo, Tabasco, Veracruz, and Yucatan.

> 8Based on the household survey data, 76 percent of respondents attended a class in the in-kind villages assigned to receive classes and 69 percent attended a class in the in-kind villages assigned to not receive classes. In both cases, average attendance was roughly four classes over the course of the program. Furthermore, assignment to classes did not affect total food expenditure or the composition of food expenditure (results available from the authors).

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