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Cash versus Kind
This paper presents results from a survey on the Mukhyamantri Cycle Yojana in Bihar that provides money to purchase a bicycle to every student who is enrolled in Standard 9 of a government-run/aided school. The paper finds that the bicycle programme has performed well in terms of coverage rate and curtailing direct forms of corruption but a large majority of the beneficiaries stated their preference in favour of receiving the benefits in kind instead of cash. It analyses the determinants of beneficiaries' preference for cash versus kind and finds that the demand-side factors and village characteristics (accessibility of markets) play a dominant role in shaping beneficiaries' preferences.
We thank the International Growth Centre for funding the survey, and participants in the Growth Week of the IGC in London, and IGC conferences in Delhi and Patna for their helpful feedback. We also thank Sujata Balasubramanian, Aaditya Dar, Reetika Khera, Nisha Malhotra, A Mushfi q Mobarak, and Karthik Muralidharan for helpful comments. We are grateful to Abhishek Chaudhary for research assistance.
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