We carry out a cluster randomized trial among 979 households in rural El Salvador to test whether shoe donations exhibit negative impacts on local shoe markets. Households in half of our communities were given a pair of children’s shoes at baseline (treatment communities), while all households were given coupons that could be used for shoe purchases at a local shoe store. Although point estimates on coupon redemption and difference-in-difference estimations indicate shoe purchases to be slightly lower among households receiving the donated shoes, we find no statistically significant difference in market shoe purchases between treatment and control households.
Bruce Wydick, Elizabeth Katz & Brendan Janet. Do in-kind transfers damage local markets? The case of TOMS shoe donations in El Salvador. Journal of Development Effectiveness Volume 6, Issue 3, 2014. DOI: 10.1080/19439342.2014.919012