Ought we to help hungry households with cash or with food? Evidence on consumption and nutrition from a randomized control trial in Mexico:
households do not indulge in the consumption of vices when handed cash. Furthermore, there is little evidence that the in-kind food transfer induced more food to be consumed than did an equal-valued cash transfer.
the in-kind basket contained 10 individual items, and these transfers indeed altered the types of food consumed for some households. While this distorting effect of in-kind transfers must be a motivation for paternalism, households receiving cash consumed different, but equally nutritious foods.
Finally, there were few differences in child nutritional intakes, and no differences in child height, weight, sickness, or anemia prevalence.
Full paper here.
There might be other rationales for sending food over cash. I remember Lant Pritchett describing the decision to distribute rice not cash after Indonesia's 1997 crisis. Rice bags are huge, heavy and inefficient. This was exactly what they wanted–for it is much more difficult for middle men to steal huge, heavy, inefficient things.
