# I. INTRODUCTION

We leverage a randomized evaluation of the Philippine flagship anti-poverty program, a conditional cash transfer, to investigate impacts on prices of key food goods and implications for nonbeneficiary welfare. Conditional and unconditional cash transfer programs reach 380 million people in developing countries people around the world (World Bank 2014), and an extensive literature has considered the direct and indirect effects of such programs (Fiszbein and Schady 2009; Baird et al. 2013; Saavedra and Garcia 2012; Hanlon, Barrientos, and Hulme 2010). However, the study of possible general equilibrium effects has been limited to three potential channels. Evidence suggests significant general equilibrium effects can occur through the labor market (Muralidharan, Niehaus, and Sukhtankar 2017) as well as informal insurance and credit markets (Angelucci and De Giorgi 2009) but that there are no or limited food market responses (Attanasio and Pastorino 2019, Beegle, Galasso, Goldberg 2017; Cunha, De Giorgi and Jayachandran 2019; Haushofer et al. 2019).<sup>2</sup> A central contribution of our paper is to identify meaningful local food price increases from a targeted cash transfer program, particularly for perishable and less-easily traded protein rich foods. This finding is consistent with a conceptual framework distinguishing between the relative price effects of cash transfers on easily traded and less easily traded goods.<sup>3</sup> We then show that these price increases affect important outcomes: children of nonbeneficiary households have significantly worse nutritional status, an effect that we trace to a decline in protein intake. Child malnutrition, especially stunting, has lifelong economic consequences through its effects on human capital accumulation (Galasso and Wagstaff 2019; Vogl 2014; Currie and Vogl 2013; Hoddinott et al. 2013).

> 2 Attanasio and Pastorino (2019) show that while cash transfers from Mexico’s _PROGRESA/Oportunidades_ program did not affect the average price of staples, they did steepen the slope of the price schedule for those goods. Beegle, Galasso and Goldberg (2017) find that a large-scale public-works program in Malawi significantly worsened food security for nonbeneficiary households in treated villages. The authors rule out prices, as well as crowding out of traditional risk-sharing mechanisms, as channels for the impact but are otherwise unable to pinpoint the exact channels. Cunha, De Giorgi, and Jayachandran (2019) study the impact of cash transfers on selected food prices in the context of a comparison of in-kind and cash transfers. They do not find that cash transfers led to significant food price effects, including in communities identified as less developed or that have less integrated markets. An earlier version of their paper (Cunha, De Giorgi, and Jayachandran 2015) documented a six percent increase in food prices in remote communities. Ongoing work in Kenya tests the effects of transfers on prices and wages in a context of low treatment saturation and find limited evidence of spillovers (Haushofer et al. 2019).

> 3 Broadly speaking, we use the terms tradable and non-tradable to distinguish goods that have relatively low versus high transportation and storage costs. We define the terms tradable and non-tradable precisely below.

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