Money or power? Choosing COVID-19 aid in Kenya

Participants in an experiment comparing demand for cash transfers and electricity subsidies in urban Kenya, overwhelmingly prefer cash given the proliferation of mobile money via platforms like M-PESA and preference for short-term liquidity. Conversely, in rural Kenya, slightly more respondents opted for electricity token transfers given that they face saving constraints with the concern that they might spend money on extraneous items due to social pressure. Electricity consumption increases more with token as compared to cash transfers.

In response to the COVID-19 pandemic, more than 100 countries introduced aid programmes that lowered the cost of utilities such as electricity, water…