Variation in the economic rationality caused by the subsidy “familias en acción” in San Juan Pasto, Colombia

Abstract

This current research studies some alterations generated by the program “Families in Action” on economic rationality of beneficiaries of this subsidy in the city of San Juan de Pasto, Nariño, Colombia. It starts the candidates’ Behavioral Economics and the methodology proposed by the Experimental Economics. Through a simulation platform, as part of a quasi-experimental design, the behavior of the subjects is analyzed by viewing the consume of sumptuary properties, saving and investment decisions and the search of a well-paid job. The findings indicate that the reception of the subsidy from the program does not generate significant changes in the decisions of beneficiaries about savings, investment and seeking gainful employment, however, an increase in the consumption of luxury goods is presented, this variation is higher in the population that has received the subsidy for an extended period of time, so it could be argued that a conditional cash transfer program that is perpetuated long, generates behavioral habits beneficiaries different from those expected by politics.