Do in-kind transfers damage local markets? The case of TOMS shoe donations in El Salvador

We carry out a cluster randomised trial among 979 households in rural El Salvador to test whether shoe donations exhibit negative impacts on local shoe markets. Households in half of the 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.