Spillovers of Community-Based Health Interventions on Consumption Smoothing

Community-based group interventions are a cost-effective way of delivering programs in low-income settings. Design features may influence behaviors beyond those targeted by the intervention. This paper studies spillover effects of a participatory community health intervention in rural Malawi, implemented through a cluster randomized control trial, on an untargeted outcome: consumption smoothing after crop losses. While crop losses reduce consumption growth in the absence of the intervention, households in treated areas compensate for this loss and perfectly insure their consumption. We rule out better self-insurance and labour supply adjustments as drivers, indicating that informal risk sharing must have improved. Suggestive evidence shows that health improvements cannot explain the whole effect and instead social interactions, which may have alleviated contracting frictions had a role to play.