Impact of Mexico's Oportunidades Program on Food Demand

Comparative Analysis of Food and Nutrients Demand in the Context of the Conditional Cash Transfer Program Oportunidadesin Mexico Ana Elena Meza González Supervisor: Dr. Christine Wieck UCL – UBonn 08.07.2013

Content • Introduction • Oportunidades • Research questions • Conditional Cash Transfers • Analytical Framework • Methodology • Results • Conclusions • Recommendations

1. Introduction Intro Oportu-nidades • 18.2% of Mexican population suffers from food poverty (2008) ~ 3.4 million households ~ 19.5 million people Hypothesis Figure 1.1 Percentage of people suffering from food poverty. 1992 - 2008 CCT Framework Method Results Conclusion Source: taken from (CONEVAL, 2010)

1.aOportunidades Intro Oportu-nidades Components of the Program (Irala Burgos, 2012) • Direct cash transfer to women to improve quantity, quality and diversity of food, and thus provide better nutrition. • Nutritional supplements: children 4 mo. – 2 years. Lactating and pregnant women. • In 2008 – Aid for a Better Living Conditions: • Grants to children under 18 who regularly attend school between 3rd grade and 3rd year of High school. • Girls grant > Boys grant in secondary school. • Regular visits to health centers. • Health and nutritional workshops targeted to women. • The cash transferred represents on average 25% of the total income received by rural families, and between 15 to 20% of urban families’ income Hypothesis CCT Framework Method Results Conclusion

1.a Oportunidades Intro Oportu-nidades Nutritional Impact : • Oportunidades has lead to a significant increase in children anthropometry. • One year after the implementation of the program: beneficiary children in rural areas (44%) were found to be anemic, compared to 55% of the children in the control group. In urban areas, there was no significant difference among anemia rates. • There were not found statistically differences in the serum concentration of ferritin or soluble ferritin receptor, nor in serum zinc and retinol concentration. • (Behrman & Hoddinott, 2005)(Leroy, Ruel, & Verhofstadt, 2009) • There has not been an improvement on the micronutrient status even after the delivery of food supplements. Hypothesis CCT Framework Method Results Conclusion

1.b Research questions Intro Oportu-nidades • The aim of this study is to assess the impact of the Cash Transfer Program Oportunidades on nutrition of beneficiary households. • The objective is to analyze the food and nutrient demand of the recipients of the cash transfer program Oportunidades by estimating their food and nutrient elasticities with respect to income and price. • This study will try to answer the following research questions: • Has the Conditional Cash Transfer Program Oportunidadesachieved to improve food availability of the households recipients of the transfer compared to no beneficiaries? • Has the Conditional Cash Transfer Program Oportunidadeslead to diverse and nutrient-rich food consumption? Hypothesis CCT Framework Method Results Conclusion

2. Conditional Cash Transfer Education in Health & Nutrition to Women Cash to Women Fortified Products Program Health Visits (Condition) Education (Condition) Intro Underlying Causes HH Income & Women’s Income Control Use of Health and Nutrition Services School Enrolment & Attendance Oportu-nidades Women’s Knowledge & Awareness Women’s Time • Figure 2.1 Mechanisms by which conditional cash transfer programs may affect nutritional status Health Supply Education supply Hypothesis HH Food Security-Diet Quality /Quantity Feeding & Care Practices Educated Girls CCT Intermediate Causes Food / Nutrient Intake Health Long Term Framework Household Members’ Nutrition Method Results Conclusion Source: adapted from (Leroy, Ruel, & Verhofstadt, 2009)

2. Conditional Cash Transfer Intro Education in Health & Nutrition to Women Cash to Women Fortified Products Program Oportu-nidades Health Visits (Condition) Education (Condition) • Figure 2.1 Mechanisms by which conditional cash transfer programs may affect nutritional status Hypothesis Underlying Causes HH Income & Women’s Income Control Use of Health and Nutrition Services School Enrolment & Attendance Women’s Knowledge & Awareness Women’s Time CCT Health Supply Education supply HH Food Security-Diet Quality /Quantity Framework Feeding & Care Practices Educated Girls Method Intermediate Causes Food / Nutrient Intake Health Results Long Term Conclusion Household Members’ Nutrition Source: adapted from (Leroy, Ruel, & Verhofstadt, 2009)

3. Analytical Framework Intro • Figure 2.3 Beneficiary and No Beneficiary Households of Conditional Cash Transfer Programs. Oportu-nidades Y (Food) C Hypothesis Beneficiary Household A CCT F Non-beneficiary Household Framework E Method D Xmin B X (Education, Health) Results Conclusion

3. Analytical Framework Intro • Data: 2010 National Survey of Households’ Income and Expenditure (ENIGH). • “Mexican System of Equivalent Food” (PérezLizaur et al., 2008). • Table 1. Household Characteristics Oportu-nidades Hypothesis CCT Framework Method Results Conclusion

3. Analytical Framework Intro • Figure 3.1 Multistage Demand System Oportu-nidades Hypothesis CCT Framework Method Results Conclusion

4. Methodology Intro Unit value Quality Elasticity Oportu-nidades Leser’s approach First Stage Food-at-home Hypothesis Second & Third Stage 1. QUAIDS CCT Framework Method Results Conclusion Ecker, O., & Qaim, M. (2011) Tafere, K., Taffesse, A. S., & Tamiru, S. (2010).

4. Methodology Intro Second & Third Stage 2. Two step Censoring Oportu-nidades 3. Endogeneity Hypothesis CCT Framework Income Elasticity Elasticity Method Marshallian Price Elasticity Results Hicksian Price Elasticity Conclusion

4. Methodology Intro Elasticity Unconditional Elasticity Oportu-nidades Nutrient Elasticity wrt Expenditure Hypothesis CCT Nutrient Elasticity wrt Price Framework Method Results Conclusion

4. Methodology Intro • Limitations of the study • The disturbance terms of the final model are heteroscedastic(Tafere, Taffesse, & Tamiru, 2010), • The adding-up restriction cannot be imposed via parametric restrictions (Tafere, Taffesse, & Tamiru, 2010), • under- or overestimation of expenditure, • food purchased but not actually consumed, • intra-household food allocation, • food preparation, • number of food items considered in this research. Oportu-nidades Hypothesis CCT Framework Method Results Conclusion

5. Results Intro Oportu-nidades Hypothesis CCT Framework Method Results Conclusion

6. Conclusion Intro Oportu-nidades • Quantity • May not be enough to cover the necessity for food. • The cash transfer may be diverted into other type of expenditure. • Diversity • Increased within food groups. • Similar among groups. • Quality • Beneficiaries depend on few products (maize, beans, eggs, tomatoes) to get most of macro- and micronutrients. • An increase in income would increase staple food and complement consumption, more than animal products, vegetables and fruits. • Positive effect of nutritional and health education. Hypothesis CCT Framework Method Results Conclusion

7. Recommendations Intro Oportu-nidades • Future research: • Increase the number of food items in the study. • Survey on consumption not on expenditure. • Other policy impacts. • Policy recommendation: • Near-to-cash transfer to meet the objective of the program. Hypothesis CCT Framework Method Results Conclusion

Intro Oportu-nidades • Illustration: Marcelo Romero Thank you. Hypothesis CCT Framework Method Results Conclusion

Intro • References • Behrman, J. R., & Hoddinott, J. F. (2005). “Programme Evaluation withUnobservedHeterogeneity and SelectiveImplementation: The Mexican ‘PROGRESA’ Impact on Child Nutrition.”. Oxford Bulletin of Economics and Statistics , 67 (4), 547-569. • Ecker, O., & Qaim, M. (2011). Analyzing Nutritional Impacts of Policies. An Empirical Study for Malawi. World Development , 39 (3), 412-428. • Leroy, J. L., Ruel, M., & Verhofstadt, E. (2009). The Impact of Conditional Cash Transfer Programmes on Child Nutrition: a Review of Evidence using a Programme Theory Framework. Journal of Development Effectiveness , 1 (2), 103-129. • Pérez Lizaur, A. B., MarvánLaborde, L., & Palicios, B. (2008). SistemaMexicano de AlimentosEquivalentes (3rd Edition ed.). Mexico: Fomento de Nutrición y Salud, A. C. • Tafere, K., Taffesse, A. S., & Tamiru, S. (2010, April). Food DemandElasticities in Ethiopia: EstimatesUsingHousehold Income ConsumptionExpenditure (HICE) Survey Data . Discussion Paper No. ESSP2 011. Oportu-nidades • Illustration: Marcelo Romero Hypothesis CCT Framework Method Results Conclusion

Impact of Mexico's Oportunidades Program on Food Demand