Effect of Cash Transfers on Household Consumption amongst the Vulnerable Population in Awendo Sub-County

Abstract

Despite the national cash transfer programme, poverty rate among the Kenyan population is still high at a prevalence rate of 48.9% in 2016 up from 45% in 2008. In Kenya, poverty prevalence is disproportionately spread across the 47 counties and sub-counties. In Awendo sub-county, poverty prevalence rate is 49.8 % in 2018 which is higher than the national figure prompting this empirical study. The purpose of this study was to analyze the effects of cash transfer on consumption among vulnerable households in Awendo Sub-County. The study was anchored on the Life Cycle hypothesis of consumption and savings, the study used a correlational design to aid the determination of relationship and association between cash transfers and status of household consumption. Using stratified sampling method, a total of 390 respondents were selected. However, the response rate was 98.7 %. Cronbach’s alpha coefficient was estimated to test for reliability and the value was 0.782 which was greater than the threshold of 0.7. The study used multiple linear regression models which indicated that, there is a positive significant effect of cash transfer on consumption (α1 =0.060;p=0.046). In conclusion; cash transfer is an important factor determining levels of consumption of the vulnerable population in Awendo Sub-County. The study recommends for policy to enhance allocations among the vulnerable population in Awendo and Kenya in general. The study provides empirical evidence on the current body of knowledge for researchers and policy makers.