of household budget significantly increased by 3.6 percent. When disaggregated into spending on dairy and eggs, cereals, and other foods, the results suggest that the decline in real income through the rising local prices of perishable foods may lead nonbeneficiaries to substitute away from dairy and eggs and toward cereals (Appendix Table 9). It is difficult to infer too much from the disaggregated spending data, as the coefficients are not precisely estimated. Nevertheless, the change in patterns between treatment and control villages is consistent with a rise in demand for protein-rich foods (as well as greater spending on other child goods) among beneficiary households, and perhaps a substitution away from protein-rich foods for nonbeneficiaries.<sup>25</sup> With the provision of cash coupled with parenting education provided during the program’s Family Development Sessions, the program was expected to impact feeding practices. Indeed, we find that the food intake of young beneficiary children has shifted in all treatment villages. But the estimates in Table 4 suggest that food intake among nonbeneficiary children does not change nearly as much as a result of the program (the point estimates for the intake of eggs and vegetables are positive although not precisely estimated, suggesting little change). However, as before, we find that saturation matters. We find that children’s consumption of proteins, particularly eggs and dairy, declines significantly in treated villages as program saturation increases. We note that in these models the direct impact of being in a program village on egg and dairy consumption is positive for this sample of nonbeneficiaries (i.e. the coefficient estimate for being in a program village is positive), perhaps due to informational spillovers of the program.<sup>26</sup> However, the interaction term with saturation is strongly negative. The lower incidence of egg and dairy

> 25Since many households in the Philippines produce food for own consumption as well as purchase food on the market, a natural question concerns whether food producers benefit from the price increase in protein-rich foods. We examine whether the typical nonbeneficiary is a net producer or consumer, using eggs as the signal good because the units are more easily measured and compared than, say, fish and fresh meat. In control villages, the average nonbeneficiary household owns 4.55 chickens (in treated villages, nonbeneficiaries own 4.26 chickens; 60 percent of nonbeneficiary households in both treatment arms own chickens). Assume the average small-flock chicken lays 20 eggs per year, yielding a total annual production of 91 eggs from a flock of 4.55 chickens (Sonaiya and Swan 2004). On average, children ages 6 to 36 months in these households consume 1.78 eggs per week, or 93 per year. Nonbeneficiary households in our sample have an average of 1.4 children under 5. Since young children’s consumption alone exceeds the average production of nonbeneficiary households, even the average home producer is a net consumer of eggs. In addition to increasing egg consumption, the cash transfer may have induced beneficiaries to diversify out of subsistence farming. Such a switch is consistent with Singh, Squire and Strauss’s (1986) model of agricultural households that produce and consume certain goods. This in turn would reduce the total supply of eggs at the village level.

> 26 Egg consumption also appears greater in the highest saturation villages in general. This may be due to various unobserved differences at the village level since high saturation villages are poorer on average and may differ in other key characteristics that determine demand patterns.

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