The Spillover Effects of Better Consumption Smoothing: Scaling Up a Seasonal Poverty Intervention in Malawi

The ability of consumers to smooth income or transfers is integral to these effectively contributing toward social protection. Smoothing at scale—particularly smoothing of aggregate shocks—might also lead to important general equilibrium price effects, creating spillovers for others in the population. The authors of this proposal will measure the direct and spillover effects of a simple, low-cost planning intervention designed to facilitate seasonal consumption smoothing among agricultural households. The researchers will test their intervention in Malawi, a setting where 6.7 million people experience hunger between harvests with negative impacts on wellbeing, child development, and economic outcomes. In a previous RCT in Zambia, this intervention led to a 15 percent increase in savings; farmers entered the hungry season with a month more food, invested more in their farms, and had 9 percent higher crop revenue. As they adapt the intervention for national scale-up in Malawi and future expansion to four million households across Africa, the researchers aim to generate evidence around the market level impacts of a social protection program, through its spillover impacts on staple crop prices and casual labor wages.