The Comparative Impact of Cash Transfers and a Psychotherapy Program on Psychological and Economic Well-being
We study the economic and psychological effects of a USD 1076 PPP unconditional cash transfer, a five-week psychotherapy program, and the combination of both interventions among 5,756 individuals in rural Kenya. One year after the interventions, cash transfer recipients had higher consumption, asset holdings, and revenue, as well as higher levels of psychological well-being than control households. In contrast, the psychotherapy program had no measurable effects on either psychological or economic outcomes, both for individuals with poor mental health at baseline and others. The effects of the combined treatment are similar to those of the cash transfer alone.
We thank the participants for their time; Tilman Graff, Magdalena Larreboure, Esther Owelle, and Michala Riis-Vestergaard for excellent research assistance; the staff of the Busara Center for Behavioral Economics; and the staff of the NGO delivering the intervention, for fruitful collaboration and comments. We thank Victoria Baranov, Barbara Biasi, Chris Blattman, Michelle Craske, Julian Jamison, Crick Lund, Joanna Maselko, Petra Moser, Robert Östling, Miranda Wolpert, and seminar and conference participants at the World Bank, BREAD, St. Andrews, LSE, Tilburg, Michigan, University of Pennsylvania, University of Connecticut, Northeastern University, UCLA, and Bocconi, for comments. This study was funded by grants to Jeremy Shapiro by the Gates Foundation and an Anonymous Donor, and by Princeton University. IRB approval was obtained from Princeton University (protocol no. 7375) and the Kenya Medical Research Institute (Non-KEMRI protocol no. 531). The study was pre-registered at https://www.socialscienceregistry.org/trials/3928. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
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